shay,To begin with, welcome to GFE!
As you're presumably leaving in August, you'll need to get your plans sorted out as soon as possible! As this is your first trip to Europe, my first suggestion is to read the Guidebook
Europe Through The Back Door as soon as possible. That will answer a lot of your questions and provide lots of information on "how" to travel in Europe.
In order to plan sightseeing and "what to do" in each location, it would be a good idea to have a look at country-specific Guidebooks. Check your local Library or larger book stores. Everyone has "favourites" with Guidebooks, so try and find the ones that best fit your travel style. Some of the more popular books are
Rick Steves, Lonely Planet, Frommer's or Let's Go.August is perhaps not the best time for travelling in Europe, as it's peak tourist season and often HOT and crowded. A lot of Italians take holidays then, so some Hotels and other places are closed.
Using a Money Belt (under your clothing) would be a REALLY good idea, as pickpockets WILL be working the areas you'll be travelling in. Store your Passport, credit cards and cash there, but keep a small "stash" of daily operating cash in an easily accessible location. Keep your Passport inside a zip-lok bag in the Money Belt so it doesn't become damp from perspiration. DON'T access your Money Belt in locations where anyone can see, as that will show thieves exactly where you keep it. Barcelona especially has a "reputation" for thieves, but they operate in most larger cities in Europe.
I'd suggest using open-jaw flights for best efficiency. Starting in England would be a good idea, as that will minimize the "culture shock", and allow you to begin the trip without any language issues. I haven't looked in too much detail, but I'd probably travel England - France - Germany - Italy - Greece - Spain. I suggested that order as the Greek Islands especially tend to start "shutting down" in the fall.
One important point to mention is that you'll have to ensure that your trip
does not exceed the three month tourist limit under the terms of the
Schengen Visa.A Railpass may or may not be the best method for getting around. You'll have to do some "homework" on that point. One thing to keep in mind is that Railpasses do NOT include the reservation fees that are compulsory on some trains (usually the "fast" trains such as the TGV in France which travels at 300 kmH). You'll probably find that travel by a combination of rail and budget flights is the best method.
A few points to mention regarding budget flights. These often use a "sliding scale", so those that book early get the best prices. The prices increase as the flight fills. Tickets are usually non-refundable and non-changeable once booked.
Be sure to read the "Terms & Conditions" carefully! Also, European airlines tend to have very restrictive baggage limits and numerous extra charges. Be sure to pack light! Normally, only ONE carry-on item is allowed!
If you could provide some idea on why you decided to go to Europe and what you hope to see, it would be easier to offer suggestions on which cities to see.
If you have a PBS TV station in your area, you might see if the program
Travels in Europe is airing in the near future. It may provide some good information on places to see.
Regarding your question on "how much money to bring", that will depend on your travel style. I'd normally suggest at least US$100 per day, NOT including Air Fare and Railpass (if used). That's to cover Hotel / Hostel, meals, and incidentals. You may be able to get by with a slightly lower daily limit if you keep the meal costs down. Eating in restaurants and "clubbing" can get expensive very quickly! For example, the "full meal deal" in Italy can be VERY expensive. That would include Antipasti, Primi, Secondi, Dolci, drinks and Coperta.
Hostels will be your lowest cost option, but you'll be staying in Dorm rooms (sometimes with an ensuite, sometimes not). I like to alternate Hostel stays with budget Hotels, just to get some privacy. As you're travelling by yourself, Hostels will be a good place to meet other travellers. You might consider taking out an inexpensive Membership in
www.hihostels.com/dba/continent-Europe-EU.en.htm as they're a reliable chain. Having a membership will provide better rates and preferred booking. There are some good independent Hostels also. One point to mention is that some Hostels are co-ed (male and female in the same dorm rooms). I haven't experienced any problems with that style of lodging, however I heard some "stories".
I know what it's like to "have the dream come true". It took me over five years to make my first trip a reality.
Don't forget to budget for Travel Medical Insurance and check your vaccinations.
If you're going to be travelling with any electronic devices (Cellphones, Cameras, etc.) or appliances (Hair Dryers) there are some important "issues" you'll need to be aware of.
Hope this helps! Good luck with your planning!