Iceland is a popular short-term and long-term destination. There are tons of ways to explore the country, even with only a few days to spare. If you like what you see there, you can always return for a longer trip! The costs listed are often going to be split between the amount of people going. The more you go with, the less you will pay in terms of accommodations and transportation.
Total Budget (per person/5 days): ~$1,200
Location & Getting There ($300-$400)
Iceland is part of Europe and situated between Greenland and the UK/Scandinavia. Iceland is a popular layover destination to Europe, so finding cheap flights can be easy! The non-stop, budget flights (and many of the expensive ones) are often overnight, so you'll just have to accept that you're not sleeping much the first night and make it work! If you're flying from the East coast, you should be able to get your flight under $400. Look at flights from Icelandair and WOW (but only do WOW if the cost of carry-on luggage still makes the flight cheaper than other options).
Transportation & Gas ($400+$90/4 people)
The best (and only) way to get around Iceland is by car. You can book bus tours through travel agencies, but I would only recommend this if you're unable to drive yourself. There are so many beautiful pull-over stops and you don't want to miss out on those opportunities. Driving around is easy as the roads are not crowded and the cars are compact.
You should book early for car rentals because most of them are fully refundable and the automatic cars might sell out quickly, so you will want to ensure you get one if you can't drive manual. If all drivers are under 25 years old, then I recommend booking through Blue Car Rental to avoid the extra fees. If you're traveling outside of winter season, which would be April-October, a small car will be perfectly fine. Make sure everyone isn't packing huge suitcases if there are four of you because trunk space is limited. Most of the compact cars can accommodate about four 40L bags in the trunk.
We reserved the Toyota Aygo (automatic) with these add-ons:
Insurances: Iceland is unpredictable, so get all the insurances available (CDW, GP, SAAP, SCDW, TP).
4G WiFi (unlimited): This is great for easy navigation and for staying connected socially. It's much cheaper to split this cost and use it for everyone in the group rather than using individual phone provider plans that have limited data.
1 Extra Driver
We had 4 people and decided to just have 2 drivers while the other 2 non-drivers split the gas costs, since they didn't carry the stress of driving in a foreign country and they could take videos/photos out the window. For 5 days of driving around, we filled up around 3.5 times and the cost came to around $90. Blue Car Rental also gave us a discount for buying gas at the local station.
What to Eat ($100/4 people)
Iceland is not really one of those destinations that you travel to just for the food. That's not to say the food isn't good, but it's not exacty budget-friendly. I recommend eating out at a few restaurants during your stay to get the full cultural experience, but mostly focusing on easy meal prep. You will be mostly on the go every day, so you're not going to have much time to eat out anyway. Bring a water bottle as well, the water from the tap is so pure and delicious!
There is a Costco (U.S. membership is valid there!) outside of Reykjavik and there's also a Vinbudin (alcohol store) right next to it. Stop by Costco and then pick up some wine and souvenir liquor bottles at the Vinbudin on your first night to get everything you need for the trip.
Accommodations ($600/4 people)
Iceland hotels can be expensive and might not have everything you need for your stay, especially if you're meal prepping. I would recommend staying at an Airbnb! They are much cheaper and they will have all the things you need for cooking. We stayed at the same place for the whole trip since we were not traveling further than 3 hours outside of Reykjavik. If you're venturing out further east, you'll want to book more than 1 place so you can save time on driving. Prices will be reduced if you're staying with more people. If you're solo-traveling, consider renting a private room at an Airbnb or looking for hostels.
Attractions that require Reservations ($350/person)
There is no shortage of sites and things to do in Iceland. When it comes to planning, there are a few you'll need to reserve and book in advance. You might not want to do all of them, but it's good to know your options and choose what seems best for you and your groups' interests.
Geothermal Pools & Spa ($110): Iceland is well-known for the Blue Lagoon, which is definitely worth going to, but try to venture out to some of the less touristy geothermal pools for a more authentic experience. Budget money for both Blue Lagoon and other pools; the other pools will be much cheaper (~$30), so you can do both for around $100.
Horseback-riding ($80-$120)
Lava Tunnel Tour ($50): This wasn't my favorite tour, but it wasn't too expensive.
Silfra Snorkeling and Diving ($100-$150): Highlight of our trip! It's expensive, but 100% worth it. We booked ours through Dive.is
Glacier Hiking ($80): This is worth doing because the glaciers are melting rapidly, and they eventually won't be there anymore to hike up and see.
Whale Watching ($90)
Miscellaneous Costs ($100)
Keep an extra budget to cover souvenirs and additional costs. This can be part of you're eating out budget as well if you plan to dine out 1 or 2 times (the meals will be around $30 per person).
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