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planning for summer 2014

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so this year I graduate college, and originally I was going to go au pair in Spain for a year but that's not me. I can't deal with kids that aren't family for a year. I'll go insane, so instead, for a month, I want to plan out a Euro trip for me and my girl friends. This is where I need the pro's help!

My questions are this:
when is the best month of the summer to go?
like spain has the march of the bulls in July, what other festivals or events like that are taking place that should be visited during the summer?
in general, what are the best places to visit?
how do you pack, cause I was planning on getting the Euro rail pass or whatever it is called, but I also tend to overpack every time so I don't know if I should just backpack or pack a smaller suitcase?
are hostels the best way to go?
lastly, on average, how much money should I realistically save up for this?

thanks for your help!
- girl on a mission

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