Renting a small flat in downtown Reykjavik using AirBnB was quite reasonable (I think around 95 USD/night).

Car rental, gasoline, and food were all pricey. If you drink, check the rules for Duty Free at KEF - I believe it's local tax AND duty free, so you can buy when you arrive and carry into the country for much less than buying elsewhere. We didn't bother as we were only planning to drink a few bottles of wine.

Food isn't cheap. I recommend going to a super market like Bonus and by skyr, pastries (ideally kleinur), bananas and maybe some dried fish and just eat that for most meals. However, there are some well priced places. Cafe Haiti which has great lamb soup or C is for Cookie come to mind. Even Dill which has world class prix fixe is well priced for what it is. Interesting enough I've found most fish restaurants to be overpriced.