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Considering a 6-8 Week trip to Europe - Need Help!

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Hello fellow travellers,
Me and my girlfriend (both 19) are considering taking a year off uni (currently studying in Melbourne, AUS) to save for 5-6 months at the start of the year, then travel for 6-8 weeks around Europe during summer and peak season, approximately July.
This is only the first phase of my research but some considerations:
We want to do the trip with approx 10k, flights not included (5-6 months work and saving at the start of the year should be able to get us around 12k)
We want to do the trip on shoestring - hostels, b&bs, backpacking with light luggage with some hotels for the occasional comfort
We definitely want to party, but also have time to relax and chill on the beach, and see the sights

I'm seeking advice on how much we need to budget? what's the cost for accommodation, alcohol, food, sightseeing, travel within Europe..will 10k cover it?
What are the the sorts of things we need to do before leaving? apart from having a valid passport obviously
And the main thing I want advice on is where should we go?!

All advice is welcomed!

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