We all have our personal preferences, so what works for me may not work for you.

My opinion is that you have too many places to see in the time you have. I would skip Milan, for example, unless you can spend a few days there and a few days in the lake towns.

Perhaps I missed it, but what month are you going to be going in. I ask because some places (Madrid, for example) are unpleasantly hot in the summer and are thus better visited in the spring or fall.

Sicily will take a while to get to. I might suggest spending that time in Naples or the Almafi coast with a day trip to Capri.

Since you want to see a lot of places, I would plot them out on a map and see if you can plan a circular route, or a linear route (flying into one place, but returning from another) which would save some time so you could see more places. For example, you could do Naples and the coast before Rome, then spend time in Rome and fly home from there. Don’t buy one way tickets; they are generally quite expensive. Search for a multi-destination ticket, the equivalent of two one-way tickets, but much less expensive.

Enjoy your trip.

1. As Clevlandbrown says, if you haven’t already bought the plane ticket look for an open juaw ticket, for example, into Madrid and out of Paris to avoid the significant time and expense involved in backtracking to Madrid.
2. Paris: visit Versailles as a day trip from Paris taking the RER (commuter light rail) as the RER station is an easy walk to the palace. Versailles doesn’t work well as a stop on your way to somewhere else as the “regular” SNCF train station in Versailles is a long distance from the palace. If you’re toting all your gear, you may want to take a taxi from the SNCF station to the palace.
3. Travel time means a max of 1 1/2 days in Prague and Budapest. That’s not, IMO, enough time to get past the basic tourist stuff and really enjoy either city. Both are great tourist visits but even better places to slow down and experience the place. I’d try for at least a total of 5 days for these two cities.
4. I doubt a rail pass will save significant money on this trip, but putting your itinerary in railsaver or the trip planner will show which, if any, rail pass would save over standard fare.

I took this as Tripe is leaving on Dec. 31. That $60 from Madrid to Barcelona is for a seat. I know you’re on a budget, but I might spend the extra 12 euros and book a sleeper berth. Or perhaps don’t wander Madrid tired all day and just fly right to Barcelona and get a good night’s sleep there that first night. Three days for Barcelona is great; forget the idea to visit small towns around it with that much time, but the day trip to Girona on the way to Paris isn’t a bad idea. With such a tight budget I would probably fly from Girona to Paris instead of paying 149 euros for a reclining seat on the overnight train. In general, either devote specific time to small towns or to the major cities near them. Trying to see the sights in a major city and some small nearby towns in a few days is too much in my opinion.

A few comments… please bear in mind that these are thoughts/suggestions that match my personal preferences and that you should always ask yourself whether it sounds like something that appeals to you.

• You’re missing Pisa! Pisa really just needs a half-day, and can be done on the way to Cinque Terre, but it’s a fairly well known attraction in that area that you’ve left off.

• Including travel, 2 days in Prague + Budapest is way too little, in my opinion. I’d consider cutting one of those two out and saving the other for another trip. If you actually had 2 full days (3 nights) in each, it wouldn’t be so bad (although still quite rushed); however, you need to account for parts of those days spent on the train as well as the time spent checking in/out of your hostel.

• Alternatively, you could cut out Southern Italy (by which I mean anything south of Rome) and allocate those 5-7 days elsewhere.

Just remember in considering your options that travel time eats up huge chunks of travel days. It’s not just the length of the train ride, but the time it takes to get to the train station, arriving a bit early so you don’t miss the train, the time it takes to orient yourself in your new city, check into the hostel, etc.

Good luck!