My No. 1 tip for doing Iceland on the cheap

This simple travel tip can save you hundreds in Iceland and other expensive...

Iceland is a hot spot for travelers these days. More than 1.7 million people from around the world visited in 2016, a 40 percent increase from 2015.

But the land of the northern lights and natural hot springs is far from cheap.

Even the basics are pricey — a sit down meal will set you back $20 to $40 and a beer typically starts around $7. But what can really put a dent in your wallet are the excursions and day trips.

A popular way to see Iceland is to take a guided tour, whether on a bus, boat, helicopter, ATV or snowmobile. Unless you're doing a standard bus tour with dozens of other tourists, expect to shell out anywhere from a couple hundred dollars to a grand per excursion.

How a $95 day at Iceland's Blue Lagoon stacks up to this $9 alternative

For the budget conscious, I recommend doing what I did when I visited in late April: rent a car and do self-guided day trips instead.

Car rentals go for $40 to $70 a day — that's less than $20 a day if you're splitting costs with two or more people. I went through Hertz and got a four-door manual for $55 a day. If you plan ahead and put in some extra research, you can probably find an even better deal.

Matt Kepnes, travel blogger and author of "How to Travel the World on $50 a Day," recommends booking through SADcars, which "offers the cheapest car rentals in the country," he says. And if you're looking for passengers to help lower your expenses, "use the website Samferda," Kepnes recommends. "This website is very popular and you'll find a lot of listings on it, especially between some of the big cities."

Travel hacks to spend less than $50 a day in Iceland

You'll want to factor in the cost of gas, which, like most things in Iceland, isn't cheap. A liter will cost you $1.84, which comes out to about $7 per gallon. Again, the more travel companions you have, the cheaper it'll be.

Driving through the countryside is one of the best ways to experience all that Iceland has to offer, and if you do it yourself, you won't be tied down to a tourist company's pre-planned itinerary.

After spending the first day of my trip walking the capital city, I hit the road on day two. I did my own version of the Golden Circle tour, a classic day trip consisting of three main attractions — the Thingvellir National Park, the Geysir geothermal area and the Gullfoss waterfall — but added in a few additional stops, including homemade ice cream at a family run farm and a visit to a hidden, natural hot spring.

If you drive the country yourself, you can pull over whenever you spot something neat
Kathleen Elkins

Another perk of driving yourself: You have the flexibility to pull over whenever you see something photogenic, which happens quite frequently in Iceland.

Sure, I wasn't seeing the snow capped mountains from a helicopter or checking out the geysers on horseback, but I did catch some stunning views without dropping hundreds of dollars.

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