17-Day Ultimate Budget Backpacking Route in Iceland
Iceland is often labeled as the most expensive country in the world, but for the savvy backpacker, it is a playground of free natural wonders. This itinerary focuses on the 'ultra-lean' approach: leveraging the Strætó public bus system, sleeping in vibrant hostels, and sourcing meals from local grocery stores like Bónus and Krónan.
From the thundering waterfalls of the South Coast to the volcanic mysteries of Lake Mývatn, you will traverse the island's most iconic landscapes without the heavy price tag of a rental car. Prepare for shared dorms, community cooking, and some of the most breathtaking views on the planet.
Day 1: Reykjavik, Iceland - Arrival & Settling In
Arrive at Keflavik Airport
Clear customs and head to the arrivals hall. Iceland is cash-free, so ensure your card is ready for contactless payments.
Check-in at Kex Hostel
Drop your bags at this trendy former biscuit factory. It is the heart of the budget social scene in Reykjavik.
Free Reykjavik Walking Tour
Join a tip-based walking tour to see the Hallgrímskirkja church and the Harpa Concert Hall while learning local history.
Grocery Run at Bónus
Stock up on supplies for the week. Grab some 'Pylsur' (Icelandic hot dogs) for a cheap dinner at the hostel kitchen.
Day 2: Reykjavik, Iceland - Capital Culture
Laugardalslaug Thermal Pool
Skip the expensive spas. Join the locals at this public geothermal pool for a fraction of the cost.
Bæjarins Beztu Pylsur
Enjoy lunch at the most famous hot dog stand in the world. It is the ultimate budget street food staple.
Sun Voyager Sculpture
Walk along the waterfront to see this iconic steel sculpture, completely free to visit and great for photos.
Hostel Social Night
Join the happy hour at Kex or Loft Hostel to meet fellow travelers and find companions for the road ahead.
Day 3: Golden Circle, Iceland - The Classic Route
Þingvellir National Park
Take the public bus or a budget day tour to see where the tectonic plates meet. Entry to the park is free.
Geysir Geothermal Area
Watch Strokkur erupt every few minutes. This natural spectacle costs nothing to witness.
Gullfoss Waterfall
Marvel at the 'Golden Falls,' one of Iceland's most powerful and iconic waterfalls.
Return to Reykjavik
Head back to the capital to prepare for your journey south the next morning.
Day 4: Selfoss, Iceland - Moving South
Strætó Bus to Selfoss
Board Bus 51 from Mjódd station. This is your primary mode of transport for the south coast.
Exploring Selfoss
Walk through the new town center and visit the local church. Selfoss is a great hub for cheaper groceries.
Selfoss Swimming Pool
Another local gem. Relax in the hot tubs and meet residents for a local's perspective on the region.
Hostel Cooking Session
Check into Selfoss HI Hostel. Use the shared kitchen to whip up a large pasta meal to save for tomorrow's lunch.
Day 5: Skógar, Iceland - Waterfall Wonders
Seljalandsfoss Waterfall
Take the bus further east. This waterfall allows you to walk behind the cascade for a unique view.
Gljúfrabúi Hidden Falls
Just a short walk from Seljalandsfoss, find this hidden gem tucked inside a canyon. Bring waterproof gear!
Skógafoss Waterfall
Continue by bus to Skógar. Climb the stairs next to the falls for a view from the top.
Skógar Museum (Exterior)
View the traditional turf houses from the outside to get a sense of ancient Icelandic architecture for free.
Day 6: Vík í Mýrdal, Iceland - Black Sand Beaches
Reynisfjara Beach
Walk to the world-famous black sand beach. Admire the basalt columns and the roaring Atlantic waves.
Vík i Mýrdal Church
Hike up to the iconic white church with a red roof for the best panoramic view of the village and the sea.
Black Crust Pizza
If you have a few extra dollars, try the unique black crust pizza in town, or stick to your hostel pantry.
Overnight at Puffin Hostel
Rest up in this cozy hostel before the long transit day tomorrow.
Day 7: Reykjavik, Iceland - Transit Day
Bus Back to Reykjavik
A long but scenic bus ride back to the capital, which serves as the hub for the northern route.
Lunch at Hlemmur Mathöll
Explore the food hall for a variety of quick, relatively affordable snacks from local vendors.
Einar Jónsson Sculpture Garden
Visit this free outdoor garden featuring the dramatic works of Iceland's first sculptor.
Laundry Night
Most hostels offer laundry facilities. Use this evening to freshen up your gear for the second half of the trip.
Day 8: Akureyri, Iceland - Heading North
Bus 57 to Akureyri
This is a 6.5-hour journey. The bus has Wi-Fi and power outlets, making it a comfortable way to see the heartland.
Arrive in Akureyri
Check into Akureyri Backpackers, located right in the center of the 'Capital of the North.'
Akureyrarkirkja
Visit the striking modernist church that dominates the town's skyline.
Budget Burger at Backpackers
The hostel bar often has the best value food in town and a great atmosphere.
Day 9: Akureyri, Iceland - Botanical North
Akureyri Botanical Garden
Explore one of the northernmost botanical gardens in the world. It is completely free and very peaceful.
Hof Cultural Center
Walk through this impressive building and enjoy the harbor views from the large glass windows.
Listagilið (The Art Canyon)
Stroll through the street known for its galleries, studios, and street art.
Ice Cream at Brynja
It is an Icelandic tradition to eat ice cream regardless of the weather. Brynja is legendary.
Day 10: Lake Mývatn, Iceland - Volcanic Landscapes
Bus to Mývatn
Take the public bus to the Mývatn region, famous for its geological activity.
Hverir Geothermal Area
Explore boiling mud pools and steaming fumaroles in this landscape that looks like Mars.
Dimmuborgir Lava Formations
Walk through the 'Dark Castles,' a large area of unusually shaped lava fields and caves.
Overnight at Hlíð Hostel
Stay right by the lake to enjoy the midnight sun or the northern lights, depending on the season.
Day 11: Goðafoss, Iceland - Waterfall of the Gods
Goðafoss Visit
Stop at this massive horseshoe-shaped waterfall on your way back toward Akureyri.
Picnic Lunch
Use the benches near the falls for a packed lunch with a million-dollar view.
Return to Akureyri
Re-stock your supplies at the local Netto or Bónus supermarket.
Beer at Ölstofa Akureyrar
Experience a local pub. Happy hour is your friend here if you want to sample Icelandic craft beer.
Day 12: Westfjords Gateway, Iceland - Long Road West
Transit to Stykkishólmur
This is a multi-bus journey requiring careful planning on the Strætó app to reach the Snæfellsnes Peninsula.
Borgarnes Stopover
Use the transfer time to visit the Settlement Center or just walk along the scenic coastline.
Arrive in Stykkishólmur
Check into a local guesthouse or the town's campsite, which has excellent facilities.
Harbor Walk
This town is one of the most beautiful in Iceland. The harbor area is perfect for a sunset stroll.
Day 13: Snæfellsnes, Iceland - Mini Iceland
Kirkjufell Mountain
Take the local bus to Grundarfjörður to see Iceland's most photographed mountain and its companion waterfall.
Grundarfjörður Village
Walk around this quiet fishing village and enjoy the dramatic mountain backdrop.
Djúpalónssandur Beach
Visit the black pebble beach and test your strength with the historic lifting stones used by fishermen.
Stay at The Freezer
This hostel in Rif is also a theater and social space—it is the best budget vibe on the peninsula.
Day 14: Snæfellsjökull, Iceland - Glacier Views
Arnarstapi Coastline
Hike the trail between Arnarstapi and Hellnar for incredible views of basalt cliffs and bird colonies.
Snæfellsjökull Glacier View
The glacier that inspired Jules Verne's 'Journey to the Center of the Earth' is visible from almost everywhere on a clear day.
Búðir Black Church
Visit the lonely black church standing against the backdrop of yellow grass and dark mountains.
Community Dinner
Join a shared meal at your hostel. It's the cheapest way to eat well and make friends.
Day 15: Reykjavik, Iceland - Returning South
Bus to Reykjavik
Bid farewell to the West and head back to the capital for your final few days.
Perlan Viewpoint
While the museum has a fee, the surrounding forest trails (Öskjuhlíð) and the walk up are free.
Nauthólsvík Geothermal Beach
If the tide is right, the sea water is warmed by geothermal runoff. Swimming is free in the summer!
Check into Loft Hostel
Loft has a fantastic rooftop terrace overlooking the main shopping street.
Day 16: Reykjanes Peninsula, Iceland - Mud & Fire
Bridge Between Continents
Take a bus out toward the airport region to walk across the small bridge connecting the North American and Eurasian plates.
Gunnuhver Hot Springs
See the powerful steam vents and learn the ghost story of Gunna at this free geothermal site.
Reykjanesviti Lighthouse
Visit Iceland's oldest lighthouse and watch the waves crash against the Valahnúkur cliffs.
Last Supper: Reykjavik Chips
Enjoy a large, affordable cone of Icelandic fries with various sauces—a favorite budget meal.
Day 17: Reykjavik, Iceland - Final Departure
Last Minute Souvenirs
Visit the Kolaportið Flea Market (if it's a weekend) for cheap Icelandic wool sweaters (Lopapeysa).
Walk the Sculpture and Shore Walk
One last breathe of fresh Atlantic air along the Reykjavik coastline.
Bus to Keflavik Airport
Ensure you arrive 3 hours early, as KEF can be busy during peak departure times.
Departure
Safe travels home with memories of the most epic budget journey possible!
Best Time to Visit Iceland
For budget travelers, the shoulder seasons of May and September offer the best balance of manageable weather and lower hostel prices. Summer (June-August) provides 24-hour daylight and the best bus schedules, but prices peak. Winter is the cheapest for accommodation and offers a chance to see the Northern Lights, but many public bus routes are restricted and the weather can be brutal.
Currency & Money
The currency is the Icelandic Króna (ISK). Iceland is almost entirely cashless; you will need a credit or debit card with a PIN for everything from bus fares to hot dogs. Tipping is not expected in Iceland as service is included in the price. To save money, always tap in the local currency if prompted by the card machine.
Getting Around Iceland
This itinerary relies on Strætó, the national public bus system. While it requires planning around fixed schedules, it is the only way to traverse the country without a rental car. For airport transfers, the Flybus is the standard. Within Reykjavik and Akureyri, the city buses are excellent, with Akureyri actually offering free city-wide bus transit to all passengers.
