Iceland is notorious as an expensive destination and probably doesn’t spring to mind as a place to go with children, but it’s totally possible and heaps of fun for families, if you follow my Top Tips for a family holiday in Iceland on a budget.  I spent 2 weeks in Iceland in the summer of 2014 with my husband and 2 children (aged 9 and 14) and didn’t spend a fortune, and yet we had the best holiday in a long time. This is how we did it.

hot pot in Iceland


The number one expense in pretty much any holiday is accommodation and in Iceland the prices for hotel rooms are crazy. So here’s my first and most important tip: HOUSE SWAP. We swapped our house with a family in Reykjavik with similar aged children. The result was no accommodation costs, plenty of room, a properly equipped kitchen for self-catering, outdoor space (balcony with barbeque and garden with trampoline), bikes, toys, video games, DVDs etc and camping equipment (more on this later). But this was not all, we also swapped cars, so no car rental costs either (a hugely significant saving in Iceland where rental prices are also crazily high.) An added bonus to house swapping is the insight you get into the host’s culture. You get to see the inside of a local home, its style, what groceries are in the larder, the books on the shelves etc. It adds another depth to the travel experience. And if you are lucky like we were, the host leaves you useful insider tips as to where to shop, eat, visit etc. There are plenty of House Swap websites on the internet where you can list your own home for a small fee. I can’t recommend it more highly for enabling travel to an expensive country.

houseswap in Reykjavik


GO IT ALONE! Many of the excursions proposed by travel companies are easily doable on your own in your own car. Iceland is a country of natural wonders nearly all of which are free to visit, so get out there and explore. You won’t be able to see everything the country has to offer if you’re on a tight budget but by doing cleverly planned and extensive day trips you’ll be able to get a very good feel for the country. Do plenty of research before your trip, read guide books, travelogues and blogs about Iceland and have an idea of what you want to see. Equip yourself with a good quality map of the country. Then browse the travel agencies in downtown Reykjavik to see what sort of places they propose to take you to, and go it alone. Clearly there are some activities you can’t do without a guide and would be foolish to attempt to. Bear in mind in summer it doesn’t really get dark so you have plenty of time to go far afield in one day, bringing you back to your free house swap in the (late) evening. You can time your visit to suit your family rather than the tour company’s schedule with the possible benefit of avoiding the biggest crowds at the most popular spots.

isolated petrol pump in Iceland


Make the most of FREE STUFF! Don’t get hung up on not being able to afford the mega-jeep safaris or heli-skiing in the interior. I promise you the natural wonders will awe and inspire you and your children. Here are some of the places we went to and things we did for free: the famous and glorious Golden Circle (Geysir, Gullfoss and Thingvellir), Krysuvik and Gunnuhver geothermal areas in the Rekjanes peninsular, watching the sunset at midnight from the Seltjarnarnes lighthouse, driving through endless spooky otherwordly lava fields, hiking to the Reykjadalur hot river and soaking in it, looking for puffins. We loved the many varied waterfalls along the south coast, driving in a straight line for kilometres on end over the the vast open gravel plains and swimming in a naturally heated outdoor swimming pool surrounded by mountains and ash from the Eyjafjallajökull volcano! Lazing in an isolated hot pot next to a glacier will be a memory I’ll have for the rest of my life and we adored the absurdity of a heated beach in Reykjavik itself – though it didn’t seem to be working the time my son swam in 11°c water! The long rectangular hot tub was perfect however and together with hot showers and a sauna the whole complex is completely free. This is just a taster of a list, we went to many more places and never failed to be impressed by the sheer exhuberance of Iceland’s natural beauty. Don’t forget to walk everywhere in Reykjavik, it’s a very walkable city, even in the rain.

hiking in Iceland


GO SWIMMING! Yes you read right – go swimming! It might not be what springs to mind when you think of Iceland but I urge you to pack your swimming costume and make the most of the fabulous variety of cheap municipal pools and other swimming/soaking spots such as natural hot rivers and hot pots dotted around the country. Every town and almost every tiny isolated community has a naturally heated geothermal pool which for a very small fee you can enjoy for an unlimited length of time. Going to the local pool is a very popular passtime in Iceland; many have slides and basketball hoops and all have the wonderful hot pots. It was one of our favourite things to do and we tried out many different ones.

swimmingpool Reykjavik Iceland


Shop in DISCOUNT SUPERMARKETS. If you are self-catering then you save a deal of money by buying your groceries in Bonus, a chain of shops found across the country. This was one of the usefull little tips left for us by the family whose house we stayed in. We compared prices and products with the high-end chain Hagkaup and found almost all the brands were the same, just signifcantly cheaper in Bonus. Shop wisely too. By eating local lamb and fish rather than imported beef you reduce costs. Buy locally produced vegetables and stay away from exotic foreign imports. By being selective and careful we found that food wasn’t so very expensive and often comparable with our (admittedly fairly pricey) part of France. Don’t forget to get tax back on any goods you buy too, it’s defintely worth it.

Icelandic hardfisk


Accept that you won’t eat out much, and that you’ll become good friends with the delicious Icelandic HOT DOG. We made plenty of picnics for daytrips and in two weeks we had 2 meals in restaurants, one afternoon tea in a café and lots of hot dogs. We also had one adult night out on the town and a meal with Icelandic friends at their house. This may not seem much compared with holidays in traditionally cheap places like the Balkans, Spain, Turkey and particularly Asia, but you’re not there, you’re in Iceland! Along with accommodation and car hire, eating out is almost prohibitively expensive for a family for two weeks. However, we found that a meal in the fun family-oriented hamburger joint, Hamborgarafabrikkan, wasn’t too pricey, infact the orange juice was cheaper than in France! And by buying a big jug of beer (which worked out at a couple of pints each) right from the start, it was perfectly reasonably priced. Icelandic hot dogs contain lamb and have a unique, and delicious, taste when combined with “everything” (remoulade, mustard and 2 types of onion, crispy fried and fresh). They are properly cheap and available at every petrol station when touring the country.

Icelandic hot dogs

So you won’t eat out often but this doesn’t mean you don’t want to have a few drinks. You’re on holiday after all, but you’ve heard that alcohol is very expensive in Iceland. Yes it is. But it’s possible both to go out for drinks and drink at home by following these tips…

Icelandic beer


Buy your favourite tipple at the DUTY FREE ON ARRIVAL at the airport. The prices are significantly cheaper than in the state-owned liqour stores and the allowances are reasonably generous. We were able to buy almost enough wine and beer for the whole of our 2 week stay upon arrival. OK we looked like complete alcoholics coming through the airport with a trolly laden with booze to be met by the keyholders of the house we were staying in, but we didn’t care! As for a night on the town, choose places that are having HAPPY HOURS and drink in HOSTELS where some decent prices can be found. We loved the Kex Hostel which had an outside deck and cool bar.

beers at Kex Hostel Reykjavik

8.  CAMP

Finally we wanted to see parts of the island that couldn’t comfortably be visited in a day from Reykjavik so we camped for a few days in a National Park campsite: another benefit of house swapping as our hosts lent us all their camping gear: tent, mattresses, sleeping bags, stove, etc. We couldn’t have done it if we’d had to hire the equipment as, you guessed it, it’s expensive. To CAMP by a glacier when it doesn’t get dark all night was something very special and if you do go for a house swap experience, ask your hosts if they have camping gear that you can borrow (it’s pretty likely they will have as surprisingly camping is very popular in this country). Camping in Iceland was a huge hit with our boys, even in the pouring rain, it just made it more adventurous!

camping Skaftafell Iceland

I hope I’ve convinced you that Iceland can be visited with children and on a reasonable budget. It’s such a unique and wonderful place that needs to be experienced at least once in a lifetime.

If you’re planning a trip to Iceland you may be interested to see all the posts I’ve written about this amazing country. Have you been or is it on your bucket list?

Related Reading:

What to do in Paris with teenagers

Tips and reasons for travelling abroad with toddlers

16 days in Vietnam

If you liked this, why not PIN it!

Iceland on a budget with kids

Enjoyed this post? Please share it