The Iceland on a budget question comes up constantly and the honest answer is: Iceland is expensive and the budget you need has a floor.

Accommodation: the cheapest options in Reykjavik are hostels at ISK 6,000-8,000 ($45-60) per dorm bed per night. There are no $15/night hostels here. Camping is possible from May to September and campsites on the Ring Road cost ISK 1,500-2,000 ($11-15) per person per night — this is the actual budget option.

Food: cooking almost everything yourself is the only way to control food costs. A meal out in Reykjavik is ISK 3,000-5,000 ($22-37). Bonus supermarket (the cheapest chain) has reasonable prices. Budget ISK 2,500/day if cooking all meals, ISK 5,000+ if eating out.

Transport: the Ring Road by rental car split among 4 people is the most cost-effective option. A basic car for 7 days rents for ISK 80,000-120,000 ($600-900) before fuel. Split 4 ways, that's $150-225 per person plus fuel. Bus passes exist but the routes don't cover everything.

The Northern Lights aren't guaranteed in any season — they require dark skies (so not summer) and clear weather. Go in October-February for the best odds.

Total realistic 10-day budget: $1,200-1,500 with camping in summer, $1,500-2,000 with hostel accommodation. It's expensive but the landscape is worth it if it's on your list.