Money

How to vacation in one of the most expensive countries on earth for only $50 a day

Iceland is a trendy destination these days, and for good reason. It's home to the northern lights, striking scenery and an increasingly popular capital city, Reykjavik.

But it's far from cheap. A sit-down meal can easily set you back the equivalent of $20 to $30, a beer will cost you $10 and, if you want to relax at the iconic Blue Lagoon, expect to shell out close to $100.

That said, after putting myself on a Cash Diet and living on $60 a week in New York City for two months, I figured it was more than possible to visit Iceland without breaking the bank. That's exactly what I set out to do when I visited for three days in late April.

I spent one day exploring Reykjavik and kept my expenses under $50 without feeling like I missed out on anything. Here's how I did it.

Note that, for simplicity, I refer to everything in U.S. dollars, but the official currency used in Iceland is the Icelandic krónur (1 USD = 102.49 ISK). And the $50 a day doesn't include transportation to and from the airport, but there are ways to do that on the cheap too.

Reykjavík, Iceland
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Reykjavík, Iceland

Stick with the cheap (or free) attractions

There's a lot to see and do in Reykjavik for little-to-no money. The one attraction I paid for was to climb to the top of the Hallgrímskirkja church, and the incredible view from there of the city and its vibrant rooftops was well worth the $9 ticket.

The rest of my sightseeing was completely free. I walked around the Old Harbour, up and down the main shopping street Laugavegur, saw the iconic Harpa building, and checked out the Solfar sculpture and Hofdi House.

Pro tip: Pack a water bottle. There's no need to drop $3 per bottle when Iceland's tap water is perfectly drinkable.

Cost of activities: $9

The $9 view from the top of Hallgrímskirkja
Kathleen Elkins
The $9 view from the top of Hallgrímskirkja

Walk the city

Reykjavik is very walkable. Rather than paying for a guided walking or bus tour, I looked up attractions I wanted to hit, planned my own self-guided tour of the city and set out on foot.

It's great exercise, you have the flexibility to stop and explore whenever you spot something cool and you won't spend a dime on transportation. Keep in mind that the weather can be unpredictable, especially in the low season, so pack extra layers and an umbrella.

I will note that I was only in Reykjavik for one day. If you're in town for a couple of days, it might be worth it to to buy the Reykjavik City Card, which will get you free unlimited travel by bus within the city. It also offers free entry into all of the swimming pools and a bunch of museums. You can buy a pass for 24 hours (about $35), 48 hours (about $47) or 72 hours (about $57).

Pro-tip: If you're relying on your smartphone to navigate, add your destinations and create a walking route ahead of time when you have access to Wi-Fi. That way, you'll be able to access your map on "airplane mode" and not have to pay for any international data.

Cost of transportation: $0

Go where the locals go

When it came to food, I was determined to avoid tourist traps and go where the locals go.

This meant, first, stopping by a trendy coffee shop recommended by my friend who grew up in Iceland's capital. While the americano I ordered at Reykjavik Roasters didn't save me any money — in fact, it ate up 10 percent of my $50 budget — it remedied my jet lag. Plus, it was neat to start the day out with the locals.

My next stop was the supermarket, which was easily the most cost effective strategy of the trip. I spent $11 on food for the day — fruit, bread, meat, cheese and chocolate milk — which is less than a typical meal out in Iceland will cost you. I shopped at the budget store Krónan, but I've also heard good things about Bónus.

Food, snacks and chocolate milk for the day cost me $11
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Food, snacks and chocolate milk for the day cost me $11

After a half-day of sightseeing, I spent a relaxing afternoon at Laugardalslaug, the city's largest swimming pool. Iceland's communal pools are a national treasure and unlike anything I've ever experienced. They're usually geothermally heated, meaning you can enjoy them in 40 degree weather, which is exactly what I did with the locals all afternoon.

Pro tip: If you're planning on going to a local pool, bring your own towel and a change of clothes. Also, be prepared to shower naked before entering. Everyone is expected to wash thoroughly in the locker rooms before hopping in.

Cost of coffee: $5
Cost of groceries: $11
Cost of the pool: $9

Mingling with the locals at the Laugardalslaug pool
CNBC
Mingling with the locals at the Laugardalslaug pool

Eat the hot dogs

If you're eating out in Iceland, find the hot dogs. They're the unofficial national food. Plus, they're the closest thing to a bargain you'll stumble upon in Iceland.

I went to the famous hot dog stand Bæjarins Beztu Pylsur. It's an unassuming spot in downtown Reykjavik that's been serving dogs to locals and visitors, including Bill Clinton, since 1937. If it's nice out, expect a long line, but it'll be well worth the wait.

Pro tip: Order your hot dog with everything.

Cost of dinner: $4.50

All in all, I spent about $38 on food, transportation and activities. Sure, I didn't enjoy a big seafood meal and I skipped the museums, but I also didn't feel like I missed out on much.

If you also want to do Iceland on the cheap, think like a local and you may be surprised by how far you can stretch $50 a day.

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