You can still get the best of Europe AND keep your wallet happy, too. Here's what you can do:

Head East!
When you put cities like Prague, Budapest, Krakow and Bratislava on your travel list, prices drop noticeably. Getting just beyond the beaten tourist path means you're paying about 10 eur for a hostel bed, 8 eur for a hearty dinner including drinks, and about 1 eur per metro pass. Conversely in London for example, prices for the same things are 30 eur, 26 eur, and 4 eur respectively.

Head South
In Spain, you can still enjoy delectable meals for cheap. Explore grand Madrid, get lost in the tight lanes of Sevilla, and admire the modern architecture of Valencia. Embrace the local culture of sampling tapas on a walking dinner, and take a siesta because the party always goes late! On a side note, Spain has benefitted from substantial EU funding for high speed rail making it easier and faster than ever to get around the country.

Travel in the Low-Season
Prices tend to fall back down around October and November and you can squeeze in a trip before the weather really turns poor. If you intend to travel in January and February, however, bring plenty of wool socks and good shoes to slosh through the rain.

Be Flexible
Smart budget travelers can save a ton of money by traveling when the flights are cheap, and not by picking dates in a far-off calendar. Set up flight price alerts, and get updates on when the right time to buy is. Pay attention to promotions like that of Iceland Air and get a free several-day layover in Reykjavik to get more bang from your buck.

Hit the Grocery Store
Drop into grocery stores along the way for a meal or two each day. Eating out at touristy restaurants adds up quickly, and sometimes it's just nice to get some fresh fruits, veggies, cheese and bread and have a nice picnic in the park. Helps the budget too!

Consider Multi-Day Transport Passes
In some cities, day passes pay for themselves by your third ride. This makes them a great deal if you're zipping around a city to sights, restaurants, back to your accommodation then out for the evening. Before you go for the individual tickets, be sure to do the math and compare your other options.