i just did a europe trip.. i did 23 days for under 2 grand including airfare.
1. for airfare, be flexible on your dates and where you fly in/out of. stalk the airfare for a week. you can usually find stuff for 850..
2. i personally like to not make plans and just see what happens.
3. i did not buy euro rail. i always heard more cons than pros with it. most round trip train/bus tickets are under 20 euro, even less if its local to the country. i dont know how much the euro rail pass is..
4. usually buying round trip bus/train tickets is only a few euro more and it is usually open return date. so i always got the return, just in case i wanted/needed to go back to where i came from. (like a major city, airport, etc.).
5. lodging, even if it is hostels will be the most expensive part. 15 to 30 euro a night adds up.. if you have ANY connections over there, hit them up and crash on the floor for free. i only paid for 4 nights worth of lodging my whole trip.
6. when you stay at the hostel, they usually have a "free" shelf in the kitchen, get creative, make pasta and tuna. or spaghetti. or meet some people and pitch in and make a big dinner.
7. as far as converting money. go to your local bank before and have them do it for free. or if you do go to a currency exchange place, just take out the 500 or whatever you need to take out to get them to do it with no commission.
8. dont drink too much. alcohol will add up fast.
9. ryan air or aerlingus or the weird german one are usually cheapest if you want/need to fly somewhere. i picked up flights for 12 euro, 28 euro, and 46 euro. again, be flexible where you fly into.
10. i've never had any luck with couchsurfer.. but you can try that out. i've heard good things about that.
11. take the free tours at hostels. pub crawls are a good way to meet people and you usually get free drinks/cover with them.
12. ONLY BRING A BACKPACK. seriously. if you're flying different places, it will save you money on checking baggage. also. lugging a suitcase around everywhere would suck. i used a kelty redwing 44 inch built in spine backpack. worked perfectly, and you can just bring it on as a carry on. its also only like 75 bucks. plenty of space, and tons of areas to strap stuff onto the external. bring 15 feet of chord and hook on some caribeaners. it seriously will save you.
this was mine not even halfway through the trip. it had way more strapped to it by the end of it.
13. dont buy a phone. just bring your smart phone, leave it on airplane mode, and use internet calling, texting. (google voice, skype, etc). it works fine, and you can find internet pretty easily.
14. dont keep all your valuables in one place. i used a wallet chain. and i kept my passport and the other half of my cash in a leather wallet thing in my inside breast pocket of my jacket.
15. if you're going with just the backpack route, i would try to not bring a laptop and opt for a tablet. smaller, lighter, and just more efficient.
i think thats everything. and this is personally based on my experience. i went to ireland, england, germany, the netherlands then back to ireland. i rented a car for a few days. saw friends. met awesome people. and yea. definitely going back sometime.