Everyone’s Going to Iceland Wrong—Here’s How to See It Like the Locals Do (For Half the Price)
There’s a side of Iceland most travelers never see—the one beyond the crowded buses, overpriced spas, and postcard-perfect stops on every brochure. It’s the Iceland of quiet moments in steamy pools with locals, meals that cost less than a latte, and landscapes so raw they feel like they belong only to you.
This version of the country doesn’t drain your wallet, and it doesn’t follow a script. It’s slower, more intimate, and far more rewarding. If you’re ready to trade tourist checklists for authentic experiences, here’s how to unlock Iceland the way those who call it home already do.
1. Skip the Golden Circle Bus Tours—Rent a Small Car and Take the Backroads
Most first-time visitors head straight for the Golden Circle on crowded bus tours. Sure, it’s convenient, but you end up following the same timetable as everyone else—standing shoulder-to-shoulder at the waterfalls, then rushing back on the bus. Renting a small car changes everything. Suddenly, you’re free to stop at that random roadside farm café, pull over for a glacier view, or take a detour down a gravel road where tourists rarely go. The landscapes don’t disappear just because you’re not on the “official” loop—in fact, the detours often deliver more jaw-dropping moments.
Driving yourself also saves money. Those bus tours can cost well over $100 per person for just a day, while a rental car split between two or three travelers works out to far less. Plus, with your own wheels, you’re not locked into someone else’s schedule—you can chase the Northern Lights at midnight or linger longer in a valley without watching the clock.
Yes, driving in Iceland takes a bit of preparation, especially with the weather that changes in an instant. But most travelers find that the independence and savings more than make up for it. Just take it slow, check road conditions daily, and stick to a small car unless you’re heading into the highlands.
- Best Months to Drive: May–September for clear roads and longer daylight
- Cost Savings: Up to 50% cheaper than joining daily tours
- Extra Tip: Download the app Veður for real-time weather updates and Safetravel is for road alerts
2. Visit Community Swimming Pools Instead of Pricey Spas
When people think of Iceland, the Blue Lagoon immediately comes to mind—and so does the steep entry fee. Locals, however, rarely go there. Instead, they head to their neighborhood geothermal pools, where hot water bubbles naturally from the earth, and the entry fee is often less than a cup of coffee. These pools aren’t just places to swim; they’re where people gather after work, swap stories, and unwind.
You’ll find heated outdoor pools, hot tubs of different temperatures, and sometimes even saunas. They’re spotless, affordable, and deeply woven into daily Icelandic culture. Sitting in one of these pools on a chilly evening, surrounded by locals chatting in the steam, feels far more authentic than any luxury spa.
The best part? No reservations, no inflated tourist prices—just walk in, pay a few dollars, and enjoy. It’s the definition of affordable wellness in Iceland.
- Best Pools to Try: Sundhöllin (Reykjavík), Laugardalslaug (Reykjavík), Hofsós Pool (north)
- Entry Cost: $5–$10 on average
- Best Months: Year-round (soaking in winter snow is unforgettable)
- Extra Tip: Don’t skip the showers before entering—locals take pool etiquette seriously
3. Stay in Farm Guesthouses Instead of Chain Hotels
Chain hotels in Iceland can eat through your budget faster than you expect, and they don’t offer much local charm. Instead, many Icelanders open their homes as farm guesthouses, often located in stunning countryside settings. Not only is this more affordable, but you also get a firsthand connection to local life—maybe even fresh eggs from the chickens out back or bread baked in the kitchen that morning.
Guesthouses typically offer cozy rooms, home-cooked meals, and warm hospitality that hotels just can’t match. Some are working farms, which means you’ll wake up to the sound of sheep or horses outside. Others are tucked along fjords or volcano slopes, offering views that luxury hotels could never replicate without doubling the price.
The trade-off? You won’t always find luxury amenities, but you’ll discover something better: authentic Icelandic warmth. Many travelers say that staying in farm guesthouses was the most memorable part of their trip.
- Best Months to Stay: April–October for better access to rural areas
- Average Price: $40–$70 per night, often including breakfast
- Bonus Perk: Easier access to hidden local sights that buses don’t stop at
- Extra Tip: Book early in summer—guesthouses fill quickly
4. Eat at Gas Station Diners and Bakeries Instead of Tourist Restaurants
It may sound odd, but Iceland’s gas stations are food havens. In a country where a sit-down dinner can easily cost $40 per person, stopping at a gas station diner or local bakery is both a money-saver and a cultural experience. Gas stations often serve surprisingly good lamb soup, burgers, or Iceland’s famous hot dogs topped with crispy onions.
Bakeries, on the other hand, are where you’ll discover fresh rye bread, kleinur (twisted doughnuts), and hearty sandwiches for a fraction of restaurant prices. You’ll also find locals lining up for their daily fix, which is always a good sign that the food is worth trying.
These humble spots are where you’ll feel like you’re part of the real Iceland—not the tourist one. And your wallet will thank you, too.
- Best Months: Any time (bakeries are cozy winter stops, diners are perfect on road trips)
- Typical Costs: $5–$12 for meals, versus $30–$50 in restaurants
- Local Favorite: Bæjarins Beztu Pylsur in Reykjavík for hot dogs
- Extra Tip: Grab bakery treats in the morning—they sell out fast
5. Shop Local Grocery Stores and Cook Your Own Meals
One of the biggest surprises for first-time visitors is just how expensive dining out is. Even a simple pizza can hit $30. Locals know the trick: shop at grocery stores like Bónus, Krónan, or Nettó and prepare your own meals. These stores stock everything from fresh produce and dairy to Icelandic staples like skyr (yogurt) and rye bread.
Cooking your own meals doesn’t mean missing out—it means eating more like the locals do. Pack a picnic for a waterfall stop, make sandwiches for long drives, or whip up a pasta dinner in your guesthouse kitchen. The savings are huge, and it allows you to stretch your trip further without compromising experiences.
For travelers staying in rentals, hostels, or guesthouses with kitchens, this tip can easily cut your food costs in half. That’s money you can put toward adventures instead of overpriced menus.
- Best Grocery Chains: Bónus (cheapest), Krónan (great selection), Nettó (open late)
- Best Months: Anytime—stores are reliable year-round
- Cost Savings: Up to 60% compared to eating out
- Extra Tip: Stock up before heading to remote regions—rural shops are limited
6. Explore Free Hiking Trails Instead of Paid Attractions
You don’t need to spend a fortune to be blown away in Iceland. Some of the country’s most stunning experiences are found on free hiking trails that weave past waterfalls, lava fields, glaciers, and coastlines. From the easy paths near Skógafoss to more rugged treks in Þórsmörk, these trails showcase Iceland’s wild heart without an entry fee in sight.
The beauty here is that every step feels like an adventure on your own terms. You won’t find ticket booths or long queues—just pure landscapes stretching endlessly before you. And with well-marked paths, you don’t have to be a hardcore hiker to enjoy them.
- Best Months: June–September for accessible trails
- Gear Tip: Waterproof boots are a must
- Cost: Free (except for some small parking fees)
7. Time Visits for Shoulder Seasons Instead of Peak Summer
July and August might sound tempting, but they’re the priciest and busiest months. Locals often recommend visiting in **shoulder seasons—spring or fall—**when the landscapes are just as breathtaking, yet the crowds thin out and prices dip.
In April and May, waterfalls thunder with snowmelt, while September brings crisp air, autumn colors, and a shot at the Northern Lights. You’ll also notice hotels, rental cars, and even flights costing less, which means more Iceland for your budget.
The best part? You’ll feel like you’ve got more of the country to yourself, whether that’s standing alone on a windswept beach or soaking quietly in a hot spring.
- Best Shoulder Months: April–May, September–October
- Savings: Often 20–30% compared to peak season
- Bonus: More space at popular landmarks
8. Join Town Festivals and Village Events for Authentic Culture
Tourist attractions show you Iceland’s beauty, but local festivals reveal its spirit. Across the country, small towns throw celebrations filled with music, food, and traditions that rarely make it into guidebooks.
Maybe it’s a fishing village festival with boat parades and dancing, or a midsummer gathering where locals celebrate the midnight sun. These events cost little to nothing to attend, but they give you something priceless: the chance to feel woven into the community, if only for a day.
Instead of watching Iceland from the outside, you’ll get a front-row seat to how people actually live and celebrate together.
- Best Months: Summer (festivals peak from June–August)
- Cost: Usually free or low entry
- Examples: Þjóðhátíð in the Westman Islands, Fishermen’s Day in June
9. Use Public Hot Springs Instead of Luxury Lagoons
Luxury lagoons look amazing in photos, but Iceland’s locals prefer the untouched hot springs scattered around the countryside. Some are just simple pools bubbling in a field, others are tucked beside rivers or hidden in valleys. The experience feels more raw, more personal—like you’ve stumbled onto a secret.
Many of these hot springs are completely free. Others might ask for a small donation to maintain the site. Either way, it’s a fraction of the cost of the big-ticket lagoons, and you’ll often share the water with just a handful of others instead of hundreds.
Sinking into a naturally heated pool, with steam rising and mountains framing the horizon, is one of the most rewarding ways to feel Iceland.
- Best Months: Year-round, though winter offers magical contrasts
- Cost: Free to $10 donation
- Popular Local Spots: Reykjadalur Valley, Seljavallalaug Pool, Landbrotalaug
10. Book Local Intercity Buses Instead of Guided Excursions
Not everyone wants to rent a car, and that’s okay. Iceland’s network of intercity buses makes it surprisingly easy to travel between towns, national parks, and even remote villages at a fraction of tour prices.
Instead of being herded around in a tour group, you can hop off at your destination, explore at your own pace, then catch another bus later. It’s not just cheaper—it’s more flexible and lets you build your own adventure.
For solo travelers or budget-conscious visitors, this option opens up the country in a way that still feels manageable, especially if driving in unpredictable weather feels daunting.
- Best Provider: Strætó bus network
- Best Months: Summer for reliable service to remote areas
- Cost: Typically $10–$40 per ride, depending on distance
11. Explore Smaller Fishing Villages Instead of Reykjavík-Only Stays
Reykjavík is fun, no doubt—but staying only in the capital means you’re missing the quieter, more authentic side of Iceland. Fishing villages dotting the coastline offer charming harbors, colorful homes, and a slower rhythm of life that feels worlds away from the city.
Places like Seyðisfjörður in the east or Siglufjörður in the north combine postcard beauty with heartfelt hospitality. Walking along the docks, chatting with locals, or enjoying fresh fish straight from the ocean turns a simple stop into one of your trip’s most vivid memories.
And here’s the secret: accommodations in these villages are often cheaper than city hotels, so you’ll save money while experiencing a side of Iceland few visitors ever see.
- Best Months: May–September for open access and lively harbors
- Cost: Guesthouses from $40–$70 per night
- Bonus: Often located near hidden fjords and scenic drives
