When you take a vacation to Europe, there will be lots of different places you will want to see, and in order to see all these different places in the most effective (and most inexpensive) manner, planning your travel in advance will be important; rather than using online travel agencies such as Expedia and Orbitz - websites that pull information from only the major airlines - do some research on your own to find airfare for smaller European airlines, as this will allow you to get much better prices, and to also compare the prices of airfare from place to place in Europe to the cost of taking a train.
It is also possible to save plenty of money on lodging by staying in hostels instead of in hotels; all throughout Europe there are hostels to choose from, and once you do a bit of research on the hostels in the areas in which you will be staying, you will find that most of them charge hardly anything - with prices often as low as 10 Euros per night!
And while you are overseas, there will definitely be some European cuisine you will want to indulge in, but try not to eat out every meal, as doing so would put a huge dent in your budget; instead, shop at local grocery stores, and use the common kitchens at the hostels to prepare sandwiches and snacks that will be easy to bring around with you for the day.
Of course, taking a lavish European vacation - with gourmet dinners and luxury accommodations - might also be something you dream of being able to do someday, but there is no reason to wait until this dream becomes a reality before taking a marvelous European vacation in the meantime, for a lot less money!