Budgeting:

Once you have a rough idea of where you're going to be going, you can start the first depressing part of planning a trip, budgeting. So how much does a trip across Europe cost? A lot.

No really! Europe is a pricey place, especially Western Europe. Eastern Europe is generally cheaper, but it's by no means as it's depicted in Euro-Trip.

When first figuring out your budget, split it into two parts. The first part are the pre-trip expenses, the things you'll need before you go, like a backpack, guidebook and airfare. The second half are the on the road costs, this includes all your hostel, food, plus all your attraction and transportation costs.

So before you get to Europe you're already looking at dishing out anywhere from $500-$2000, told you it wasn't going to be cheap. But fear not, it's worth the money you spend.

The absolute cheapest you're going to be able to get by with is $30-40/$20-$30 a day for Western and Eastern Europe respectively.

More realistically, depending on how disciplined you are, your on the road costs will probably come to be somewhere around $50-$80/day for Western Europe, and $40-$60 for Eastern Europe.

I would advise adding ~10% on top of that as an emergency fund; it's much preferable to come home with some extra money than to break the bank in Bratislava.

Money:

Once you have your budget and have raised all the necessary funds, the question becomes, "How do I get my money to Europe?" You probably don't want to be carrying a couple thousand dollars stuffed in your underwear, now do you? Luckily, you have a couple options.

The easiest and probably most common way these days is just to withdraw money in the local currency from ATMs. ATMs are abundant all across Europe, so finding them probably won't be a problem, and their fees are generally comparable (if not better) than any other method.

ATMs:

Note: Make sure your ATM card has a 4-digit PIN

ATMs are my preferred way of getting cash while abroad, they're simple, easy to find, and pretty cheap. Depending on your bank, they may charge a flat fee or a percentage, but either way they're generally compared to any other method.

Check your home bank to see what their charges and rates are for international transactions. My home bank charged something like a dollar per transactions.

Also think about opening an account with a bank that has low/no charges for certain ATMs in Europe.

While I was in Germany, I opened a Bank of America bank account, which charges no fees for withdrawals from Deutsche Bank in Germany, BNP Paribas in France, Barclay's in the UK and a handful of other banks across the globe.

I also used my home bank account, which had great international rates, for when I was in countries other than the ones with Bank of America affiliates.

Credit Cards:

Credit cards are another way to keep the amount of cash you need to carry low. However, credit cards in Europe are not as widely used as they are in the US, so don't expect to be able to charge your dinner to your Visa card.

The use of credit cards is a lot less than it is in the US, and also varies a lot by city. Obviously, in cities that cater to large amount of tourists, you're going to have an easier time using a credit card. Hostels and Hotels are going to be the backpacker's most likely place of using a credit card. It's a good way to cut down on having to always yank out cash for each night in a hostel.

While it depends on the place, Visa and Mastercards are the most widely accepted of credit cards. American Express is seen sometimes, and other cards like Discover are extremely rare.

However, beware that your credit card company will probably tack on a range of international transaction surcharges, anywhere in the range of 2-5%. So it might be worth paying for everything in cash if your cards have high fees.

Card Safety:

In order to make sure that your credit card company doesn't shut off your cards after the first time you use them, call them up before you leave and let them know you're traveling abroad, especially if you're planning on charging a lot of things to them.

Also be sure to write down the customer service telephone numbers, and international numbers if listed, so you can quickly call your credit card company if you card is lost or stolen.

Pre-loaded Debit Cards:

If you don't have an ATM card, or don't want to bring the card to your main account with you to Europe, you can buy pre-loaded ATM cards. These act like normal ATM cards, except you fill them up before you go.

I've used one from AAA and it was pretty a pretty painless operation. I just showed up to AAA with a wad of cash before I left, filled it up, then withdrew I remember it costing around $3 per withdrawal, which isn't great, but it's a safe way to keep your money.

You can check out AAA's offerings, Here.

Travelers' Cheques:

If you're old fashioned or don't want to bring an ATM card for some other reason, you can rely on the classic Travelers Cheques. They're a little bit less flexible than ATMs, as usually you have to take them to a bank or perhaps hotel, but they're safer than carrying around huge wads of cash.

While I would advise using an ATM card as your main source of withdrawing cash, bringing a couple hundred dollars in travelers cheques wouldn't be an unwise thing to do.

They are available in US Dollar, Euro and Pound Sterling, so you'll have to consider where you'd use them when you buy them. If you want more info on them, check out American Expresses site.