18-Day Ultimate Budget Backpacking Route in Iceland
Iceland is often considered one of the world's most expensive destinations, but for the savvy backpacker, it offers an unparalleled adventure of volcanic landscapes, massive glaciers, and roaring waterfalls—many of which are completely free to visit. By utilizing the national bus system, Straeto, and shopping at discount supermarkets like Bónus, you can experience the full majesty of the island on a lean budget.
This 18-day epic journey takes you across the entire Ring Road, staying in vibrant hostels and focusing on the country's greatest asset: its wild, accessible nature. Get ready for long bus rides with stunning views and nights spent sharing stories with fellow travelers under the Arctic sky.
The Itinerary
Day 1: Reykjavik, Iceland - Arrival & Budget Setup
Arrival at Keflavik Airport
Touch down at Iceland's main international hub and clear customs.
Transfer to Reykjavik via Flybus
Take the most cost-effective shuttle service from the airport directly to the BSI Bus Terminal in the city center.
Grocery Run at Bónus
Head to the 'Yellow Pig' supermarket on Laugavegur to stock up on essentials like skyr, bread, and pasta to avoid high restaurant prices.
Evening at Sun Voyager
Walk to the waterfront to see the iconic steel sculpture of a viking ship during the golden hour for free.
Day 2: Reykjavik, Iceland - Free City Sights
Hallgrimskirkja Exterior
Marvel at the expressionist architecture of Iceland's largest church. While the tower costs money, the sanctuary and exterior are free.
City Walk Reykjavik
Join a tip-based walking tour to learn about Icelandic history and mythology from a local expert.
Harpa Concert Hall
Explore the stunning glass honeycomb architecture of Harpa; the building is open to the public for free exploration.
Tjörnin Lake Stroll
Feed the ducks at the city's central pond and admire the surrounding colorful houses and City Hall.
Day 3: Reykjavik, Iceland - Local Culture & Prep
Laugardalslaug Pool
Skip the Blue Lagoon and head to a local geothermal pool for a fraction of the price to soak like a local.
Street Art Hunt
Wander through the narrow streets of the 101 zip code to find world-class murals and graffiti.
Perlan Viewpoint
Walk up the wooded Öskjuhlíð hill to Perlan for some of the best panoramic views of the capital region.
Hostel Social Hour
Mingle with other travelers to find potential carpool partners for the remote areas ahead.
Day 4: Selfoss, Iceland - Gateway to the South
Bus 51 to Selfoss
Board the Straeto regional bus for a scenic one-hour climb over Hellisheiði plateau.
Selfoss Church & River Walk
Explore the quiet town of Selfoss and walk along the banks of the mighty Ölfusá River.
Bobby Fischer Center
Visit the modest museum dedicated to the chess grandmaster who found refuge in Iceland.
Pylsuvagninn Hot Dog Stand
Enjoy a traditional Icelandic hot dog—the most affordable 'street food' meal available in the country.
Day 5: Selfoss, Iceland - Golden Circle (Budget Edition)
Thingvellir National Park
Visit the site of the world's oldest parliament and see where the tectonic plates pull apart.
Geysir Geothermal Area
Watch Strokkur erupt every few minutes; this natural wonder has no entrance fee.
Gullfoss Waterfall
Stand in awe of the 'Golden Falls,' one of Iceland's most iconic and powerful attractions.
Kerið Crater
Stop by this volcanic crater lake; there is a very small fee, but the colors are worth the few kronur.
Day 6: Skogar, Iceland - The Land of Waterfalls
Bus 51 to Skógar
Continue east through the lush farmland of southern Iceland toward the famous falls.
Skogafoss Exploration
Walk right up to the base of the 60-meter drop and then climb the stairs for a view from the top.
Skógar Museum (Exterior)
View the traditional turf houses located just outside the museum for a glimpse into ancient Icelandic living.
Kvernufoss Hike
Take the short, hidden trail to a lesser-known waterfall nearby that offers a more secluded experience.
Day 7: Vik, Iceland - Black Sands & Basalt
Travel to Vik i Myrdal
A short bus ride takes you to the southernmost village in Iceland, known for its dramatic coastline.
Reynisfjara Beach
Walk the world-famous black sand beach and admire the Reynisdrangar basalt sea stacks.
Vik i Myrdal Church
Hike up to the white church with the red roof for the classic postcard view of the village.
Krónan Supermarket Dinner
Prepare a meal at your hostel using ingredients from the local Krónan, Vik's best budget shop.
Day 8: Kirkjubæjarklaustur, Iceland - Canyons & Moss
Bus Transfer East
Journey across the vast Eldhraun lava field, the largest of its kind in the world.
Fjaðrárgljúfur Canyon
Hike along the rim of this ancient, serpentine canyon for breathtaking views of the river below.
Systrafoss Waterfall
Visit the 'Sister Falls' located right on the edge of the village, a peaceful and free spot.
Kirkjugólf 'Church Floor'
See the natural basalt pavement that looks exactly like a man-made tile floor from a medieval church.
Day 9: Skaftafell, Iceland - Glacier Country
Bus to Vatnajokull National Park
Enter the realm of the largest glacier in Europe, where mountains meet the ice.
Svartifoss Hike
Hike to the 'Black Fall,' famous for the dark basalt columns that inspired Hallgrimskirkja's design.
Skaftafellsjökull Glacier Tongue
Walk the easy, flat path to the edge of the glacier to see the blue ice up close for free.
Visitor Center Exhibits
Learn about the volcanic eruptions under the ice through the free displays at the park office.
Day 10: Höfn, Iceland - The Ice Lagoon
Jökulsárlón Glacier Lagoon
Stop halfway to Höfn to witness massive icebergs floating out to sea. This is a free natural spectacle.
Diamond Beach
Cross the road to see chunks of ice washed up on the black sand like sparkling gems.
Arrival in Höfn
Settle into this fishing port town, the lobster capital of Iceland (though we'll stick to budget eats!).
Höfn Harbor Walk
Enjoy a sunset walk around the harbor with views of the Vatnajökull glacier in the distance.
Day 11: Egilsstadir, Iceland - The East Fjords
Bus 51/56 Route
Prepare for a long, stunning day of travel as the bus winds through the dramatic East Fjords.
Djúpivogur Break
Stretch your legs in this tiny village and see the 'Eggs of Merry Bay' outdoor art installation.
Egilsstadir Arrival
Reach the main hub of East Iceland, a perfect base for exploring the surrounding forests and lakes.
Lagarfljót Lake
Take a walk by the lake and keep an eye out for the Lagarfljót Worm, Iceland's version of the Loch Ness Monster.
Day 12: Seydisfjordur, Iceland - Art & Rainbows
Mountain Pass to Seydisfjordur
Take the local bus over the Fjarðarheiði pass, a route made famous by the movie 'Walter Mitty'.
Rainbow Road Walk
Snap a photo on the famous multicolored path leading to the blue church in the heart of town.
Tvisongur Sound Sculpture
Hike up the hill to these concrete domes designed to amplify the sounds of the Icelandic wind.
Local Art Galleries
Wander through the small independent shops and galleries that make this town an artist's haven.
Day 13: Akureyri, Iceland - Capital of the North
Bus 56 to Akureyri
Cross the desolate Highlands of the north, a moon-like landscape of craters and vast plains.
Akureyri Botanical Garden
Visit one of the northernmost botanical gardens in the world; entry is free and it's incredibly lush.
Akureyrarkirkja
Climb the stairs to the city's iconic church, designed by the same architect as Hallgrimskirkja.
Hostel Cooking Night
Use the local Bónus in Akureyri to prep a meal and swap travel tips with other Ring Roaders.
Day 14: Lake Myvatn, Iceland - Volcanic Wonders
Bus to Myvatn
Head to one of the most geologically active areas on earth for a day of exploration.
Hverir Mud Pools
Walk through a landscape of bubbling mud pots and steaming fumaroles; no entry fee required.
Dimmuborgir Lava Formations
Explore the 'Dark Castles,' a labyrinth of strange and towering lava pillars.
Myvatn Nature Baths (Exterior)
If the entry is too pricey, enjoy the views and the blue water steam from the public walking paths nearby.
Day 15: Dalvik, Iceland - Whale Watching Hub
Bus to the Tröllaskagi Peninsula
Travel through stunning coastal tunnels to the quaint fishing village of Dalvik.
Dalvik Harbor Stroll
Watch the fishing boats come in and enjoy the quiet, authentic atmosphere of the north.
Hike up Böggvisstaðafjall
Enjoy a free hike with incredible views over the Eyjafjörður fjord and the surrounding peaks.
Northern Lights Hunt
With very little light pollution, Dalvik is a prime spot to see the Aurora (if traveling in season).
Day 16: Borgarnes, Iceland - History & Sagas
Long Bus Ride South
Begin the journey back toward the west coast, passing through the Skagafjörður valley.
Borgarnes Park Walk
Enjoy the Skallagrimsgardur park and learn about the Egil's Saga through the various monuments.
Settlement Center (Exterior)
View the unique architecture and the coastal views from this historical site.
Sunset at the Shore
Watch the tide go out over the Borgarfjörður, a peaceful end to a long travel day.
Day 17: Grundarfjordur, Iceland - Kirkjufell Peak
Bus to Snaefellsnes Peninsula
Head to 'Iceland in Miniature' to see the country's most photographed mountain.
Kirkjufellsfoss
Walk to the waterfall that perfectly frames the arrowhead-shaped mountain for the ultimate photo.
Grundarfjordur Harbor
Explore the town and enjoy the backdrop of dramatic cliffs and sea views.
Coastline Hike
Take an easy walk along the shore toward the lighthouse for some fresh sea air.
Day 18: Keflavik, Iceland - Final Departure
Bus Back to Reykjavik/KEF
Take the final leg of your journey through the Whale Fjord tunnel back to the airport area.
Keflavik Coastal Path
If you have time before your flight, walk the path along the rugged Reykjanes coastline.
Last Minute Bónus Run
Grab some Icelandic chocolate or lava salt as cheap souvenirs for home.
Check-in at KEF
Head to the departures hall for your flight home, having conquered the Ring Road on a budget.
Best Time to Visit Iceland
For budget backpackers, the 'shoulder seasons' of May, June, and September offer the best balance. You'll enjoy long daylight hours for exploring and lower prices than the July/August peak. If you want to see the Northern Lights, visit between late September and March, but be prepared for shorter days and more expensive heating/indoor costs. Summer offers the best bus frequency, which is vital for this itinerary.
Currency & Money
The local currency is the Icelandic Króna (ISK). Iceland is nearly cashless; you can pay for everything from a single hot dog to a bus fare with a debit or credit card. Tipping is not expected and service is included in the price. To save money, always select 'Pay in Local Currency' at ATMs and card terminals to avoid poor bank exchange rates.
Getting Around Iceland
This itinerary relies on the Straeto public bus system, which connects most major towns on the Ring Road. While efficient, buses are less frequent than in mainland Europe, so checking schedules on the Straeto app is essential. For more remote areas like the South Coast or North, the Flybus and specialized tour buses are common alternatives. Carpooling via sites like Samferda.is is also a popular way for backpackers to share fuel costs and reach hidden trailheads.
