I'll answer for one person and then you can times the general amount by the number of friends.
1st check on line for EURAIL tickets. It's usually the best, most convenient, cheapest way to travel (other than hitching which like most places isn't always the safest and especially the most convenient).
Prices vary so check specifically where you want to go and be sure to cover all the countries you would train through. You don't say how long you want to nstay, 2/3 weeks or 2/3 /4 months or longer.
Thev Euro is higher than the dollar so Europe is expensive. But the way to go is with youth hostels which there are many on line. Check basically for the ones that look good where you intend to go.
Have a lap top/tablet so you can stay on top of making reservations checking train times, etc.
Eat where the locals eat, though they may be heavy you may want to take camera, other electronics batteries with you as they cost a lot in Europe.
Generally speaking you would need approx as a MINIMUM $50 to $75 a DAY for enjoying a good trip which does NOT incl Eurail or airfare or any extra special things.
Museums vary in entry fees, going to bars (again very expensive) go to local little bars but still have enough to enjoy. Stay reasonably sober or get in trouble. Keep in mind Euro laws are tougher than ours.
Check out some of the Guide Books online there are a few.
You need to all go on line do your homework, make a lot of notes and then hold a few meetings on where, what, how, etc to travel how long, etc.
I would suggest if you are short on funds to not try to spread your trip out over a long distance, keep it within 2 or 3 countries and see more for less.
Here are some good places to go - Paris, Amsterdam, Munich, Venice, Florence, maybe Rome, a Greek island,
possibly Barcelona, the Riviera stay in Nice and chk out Monte Carlo, Lusanne take a boat ride over to Evian, go to Montreau & up into the mts for a days hike, Budapest (Hungary & Romania are still reasonably priced).
Bypass Pisa, Heidelberg, central France, Belgium. But again plan a route to save time & money.
Have Debit Cards as they are the easiest way to exchange money any time of the day. Travel light and if you buy stuff mail it home. Consider some kind of medical insurance, you never know when you may need it.
Be sure each friend can support themselves so you don't end up arguing, etc. Very important.
You can network all kinds of info when at youth hostels. Have ther little/small language/travel books handy - you each could have one for each country that you want to go to. But English is everywhere.
Do the homework.
Enjoy, it's a worthwhile adventure.
Have visited most of Europe and lived in both Italy near Pisa and Munich for over 9 yrs.
Ex wife is German. Also attended Univ of Munich for German courses.