Bus is cheaper. Train is faster, much more comfortable and often much more convenient (dozens of trains a day to choose from as opposed to a few buses, occasionally better locations for the stations). Given your itinerary, if there was absolutely anyway I could afford it, I would opt for the train in Netherlands, France, Italy and whatever countries you cross getting to/from Italy. I would look for a cheap flight to Spain, travel by train or bus between Barcelona and Madrid and look for a cheap flight, or take the overnight train to Portugal. The eurail pass is your ticket for virtually every train in the countries it covers — the small number of exceptions don’t matter with your itinerary. Some trains require reservations, which aren’t covered by the pass. All overnight trains require reservations — ranging from 5 to 15 euros for a seat to 20 to 30 euros for a berth in a 6 berth couchette to over 100 euros for a private room on one of the fanciest hotel trains. Most overnight trains only count as 1 rail day on a flexi pass, even though you are traveling on two days. You mark arrival day on your railpass, so departure day is free if you haven’t already used that day for another train.

Your budget seems impossibly tight if it includes your transatlantic flight and railpass so bus may be your only option and that might still be pretty tight. I also think your trip is pretty rushed given the huge and interesting cities you’ve planned plus long distances and thus long travel times involved.

Yeah, we typically tell people to budget about $100 per day (not including plane ticket). I’m not sure why people always seem to suggest buses in Spain but not elsewhere. Only do bus if you absolutely need to save money.

In this case because the train between Madrid and Barcelona costs 120 euros and the bus costs 30, although the bus takes over twice as long.

ok i fixed up my euro trip to 2 weeks, and plan to spend roughly 1800 to 2000$ and travel london-amsterdam-paris-nice-milan-venice-rome.
is that more reachable?
if so i can just plan another trip to see spain and portugal next year.

Standard recommendation for summer travel from North America would be…
1. $1000 plane ticket + $200 per week for city to city transportation + $100 per day + $200 emergency cash, so roughly $3,000 for two weeks.
2. An average of 3 days per city, so about 5 cities and this will still be fairly rushed if 2 weeks includes your transAtlantic flights which eat up 1 1/2 to 2 days. London, Paris and Rome each “need” 3 days to even scratch the surface. The others need at least 2 days, not counting travel time, although a day would probably suffice in Milan (I’d skip Milan unless you have a specific reason for going there).

the thing is i’ve already seen paris, rome and nice in another trip with my school. and i got a hook up for a cheap flight.

OK, you didn’t ask for itinerary advice and you didn’t want it. I apologise for that. You did ask for budget advice, but you apparently didn’t want that either. You implied questions about eurail passes, but didn’t really ask any and I don’t want to insult you with more unwanted advice, sooooooo What do you want to know about eurail passes?

ok my bad dude, and ye your right, this is way too rushed, i just gotta plan better for next year. sorry if i ticked you off. i was just caught up in the moment, REALLY excited you know?

I see you tried to post again in a sticky about eurail rules. I see two very unrelated questions, both of which are largely matters of personal travel style.
1. Should I book hostels in advance? (a question that belongs on the “hostels” forum) You don’t have to book hostels in advance. You will always find someplace to stay — however you may spend several hours, tote your back pack for a mile or more on foot, and take several subways, trams and buses to actually find a place. If your itinerary is set, then I’d recommend booking most of your hostels in advance. Always book your first night in advance— you don’t want to arrived sleep-deprived, jet lagged, culture-shocked, AND lost and homeless. I like to book last night at least a couple of weeks in advance to have plans A and B (transit strikes and other glitches are a fact of travel) for getting to the airport for the flight home. You can book anything you didn’t book before you left home a few days in advance by phone or on-line while you’re in Europe.
2. Should I buy a railpass? (a question that belongs here) This is really several questions…. Should I travel by train? It’s generally the fastest and most convenient way, but it’s not usually the cheapest. For most itineraries a combination of train, a cheap flight or two and maybe a bus or ferry ride to get somewhere off the rail line works best. Should I buy a railpass to pay for the train tickets? This depends on your exact itinerary, your willingness to do LOTS of work searching out on-line special fares from the individual national rail company websites, your willingness to commit to non-refundable tickets several weeks in advance and some just plain luck in actually being able to buy the tickets you need from the individual national rail companies. Generally, a combination of railpass and a point to point ticket or two works out cheapest. Which railpass is best? In your case, a railpass will probably save money — especially for travel in France. Try putting your itinerary in the trip planner to see what railsaver recommends for a railpass. That’s the best general recommendation you’ll get. Anything better requires the aforementioned lots of work on your part.