It will come as no surprise to most people that Reykjavik is not a budget destination.
I met someone in a bar who claimed to have done a 10-day trip for €95. Obviously couch surfing (you clearly wouldn’t get a hostel bed out of that budget), he bought two kilos of dried pasta with him and cooked up a portion of that every night (having said that, he didn’t look particularly healthy, so maybe plain pasta every night for dinner does not a healthy body make).
He also talked of stealing toilet paper whenever he came across it. He’d be really great to host on Couchsurfers wouldn’t he? Stands in your kitchen boiling up his little bit of pasta on a night and then steals your loo paper on the way out.
My four days (well three-and-a-half really) came in considerably more expensive than his ten, at around £150 (USD 240), excluding the guesthouse and a ‘golden circle’ day-trip that I put on my credit card.
The trick with travelling is to find a balance that suits you so that you can still enjoy yourself but are not needlessly spending money on things that don’t interest you or are not so important.
It depends what your priorities are. I stopped off in little cafes, bought a beer in a bar with some live music and visited a spa, which all cost money. I didn’t go shopping for souvenirs or eat out in restaurants or stay in a bar drinking all night or get taxis everywhere, because those things don’t matter to me. So it depends what you like, or need, to do.
Thai/noodle restaurants are a good place to eat in Reykjavik if you are on a budget. There is a small but significant Asian population in Reykjavik and Thai restaurants are often cheaper than Icelandic ones (not as cheap as in Thailand of course but a good deal for Iceland nevertheless).
Another option is to get food from one of the numerous convenience stores and to go eat in the park or in your hostel if they allow it/have eating space (my guest house had a tiny little ‘kitchen’ area; no cooking but there was a fridge and a little table to sit at).
There is no expectation on you to tip in Iceland; the person serving you or driving your bus is already earning a fair wage. For someone who finds tipping endlessly confusing (who to tip, how much to tip, when to hand over the tip is an endless worry for me when travelling) this can make life a lot easier.
Anyone who thinks socialism doesn’t work needs look no further than Iceland. It stands as a testament to free medical, free university education, a living wage and equality of opportunity. There is very little crime (just one prison on the island, housing around 500 people, mostly for crimes connected with drugs) and low unemployment. People work for a fair wage, pay high taxes, yet know that this buys them many advantages.
There is no military to pay for; Iceland does not have an army. This obviously frees up more of their taxes for the stuff that actually matters, such as health and education. They have a police force, unarmed, who are responsible for keeping the peace.
When the financial crisis hit Iceland, the savings of ordinary working people were protected. Instead, the banks were renationalised and the bankers went to jail.
With a relatively low population Iceland is looking to entice more people, in stark contrast to most of the rest of Europe where our main preoccupation seems to be how to keep people out. About eight percent of Iceland’s population is foreign; prospective immigrants are put off by the difficulty of the language (although I suspect the weather doesn’t help either).