Nothing is inexpensive when traveling in Iceland, but it will definitely be worth it. In Reykjavik, you can find anything from luxury hotels to cozy campsites. The AirBnB scene is fairly advanced. However, due to a recent increase in tourism, not all guesthouse are created equal, and TripAdvisor can come in very handy when making a decision concerning where to stay.
You can look at our Recommended Professionals to find wonderful hotels in the countryside of Iceland.