does this budget seem OK?

You seem to have planned thoroughly. Nice job. You could probably shave some money off the surface transport! If you are getting tickets for Paris-Rome from RailEurope, they're very likely overpriced. I'd look into cheap flights for this long trip instead at www.whichbudget.com - You'll probably find something for well under 100 Euros. Check trenitalia.com for fares within Italy. I'd want about a grand or so in my account, accessible via atm, for emergencies

Bethanie:
Great job! My only comment would be on food budget. It's low, by my account. Hope you don't drink soda! Be prepared to refill your water bottle at a tap or public fountain (very safe in Italy anyway). If you are in a B&B so breakfast is included, plan $10 for lunch and $25 for dinner, $5 for "snacks" which means a coffee or gelato. That's $40 and it most likely will not cover beer or wine if you like to have an adult beverage noe and then. Plan an extra $10 per day for food, if you can. If you don't spend it, great. If you need it, well, you'll be glad. In Italy, buy your train tickets as soon as you can. Ask for a "mini" discount. Might save a few euros. Oh, and Rome has a new lodging tax, payable in cash. I think a couple of euros per night. Be aware. In Venice, be sure you buy a vaporetto pass at http://www.veniceconnected.com at least 7 days before you leave. One ride is 6.50 euros unless you have the pass. You can buy 12, 24, 48, 72 hour (etc.) passes. Well worth it. Look at the Roma Pass, too. Good savings possible with planning.

Thanks for the advice! I have just recently heard about these "mini" fares...I think you have to book them at least a day in advance, but they seem to offer good savings. I will definitely be looking into that! We will probably up our food budget by $10...$50 might be more reasonable. We don't need fancy, but we still want to have a great time! If I can shave money from the surface transport, that will go to food. We are definitely getting the Paris Museum Pass, Roma Pass, and probably a vaporetto pass (not sure if this is worth it...I've read/heard Venice is completely walkable. I'm sure we will want to take at least one ride, for the experience, however.) I know for sure we will be riding on it from the train station to the vacinity of our apartment, so that's at least 1. And then we will have to take the Alilaguna (sp?) boat to the airport.

Looks pretty good to me... I spent a total( including airfair, railpass, etc, etc ) of $6500 Canadian for a 39 day trip in 2009 ( shared the costs of accommodations with a friend) so your budget looks quite reasonable

$3851-694=$3157 for 20 days, $158/day. It seems a bit high to me, but than I generally make short hops between small towns for <$100/day, single occupancy. You're making great leaps and staying in pretty expensive cities. The place where you seem to be doing the best is on accommodations, only €43 per night in major cities. You indicated London to Paris was already booked, but you did not say the same for the Paris to Rome night train. Better have that booked well in advance, because night trains are popular and sell out well in advance. $40 (€28) seems a little low for meals in a big city (one sit down dinner in Paris could kill your budget for days), but if you're staying in apartments and hostel, you should have the opportunity to fix your own meals with food from the grocery store (do they sell Ramen noodles in Paris).

Venice itself is walkable. Confusing (make sure you have a map!!) but walkable. However, the vaporetto can make getting from one part of the island to the other quicker if you want, and it is also needed if you are interested in visiting Burano, Murano and/or Torcello. I had a 12 hour pass one afternoon to visit the outer islands, and I was so glad I did! You do not need to buy these 7 days before you get there however, you can buy the 12-72 hr passes while you are there. If you are young (probably not eating a ton!) and don't care about the fanciest food, 40 may be enough (depending on what the exchange rate is while you are there!). You can go pretty cheap for lunch, just buying a simple sandwich and eating it at a fountain or something instead of sitting down in a restaurant. Since you have a travel partner, you two can buy a small loaf of bread and some meat and make your own sandwiches occasionally. If you do want beer and wine, I would factor in more money. Remember though in Italy just buy the carafes of house wine! No need to buy bottles, the house wine is usually still quite good and CHEAP. Edit/note: now I see you're staying in hostels/apartments. Definitely do some grocery shopping for your apartment and that will keep food costs down!

You seem to have planned everything out. What my wife and I do at this stage is stop averaging (except food). What I mean is, you know the cities you are going to and you already know you static costs for major transportation and lodgings. Now do the same thing with your site-seeing. Look at all the attractions you want to visit and begin to add up the cost of admission for each one. We usually do this by city to keep it manageable. It won't take long before you figure out where you can add and where you need to lose some things. You might want to include local transportation in this as well. RS guides usually give good info about passes and one-time rider fees for subways, buses, etc. By figuring all of this out ahead of time, you know about how much money you need in each city and you aren't having to constantly figure and refigure on the fly about whether or not you can afford a specific museum or not. You also don't have to worry about Venice while you are in Paris - what I mean is you don't have to worry in Paris about running out of money by the time you get to Venice - because you already have that money budgeted out and you know how much you need. For food, I would budget $50 a day. If you don't spend it all, you can use it for spontaneous extras or bring some home (always a nice feeling). But you also won't have to worry if one night you decide to go to a fancy restaurant and spend a little more. We usually do grocery stores/bakeries for breakfast and lunch so we only "go out" for dinner - saves a LOT. If you have a more concrete idea of the money you'll spend by doing this, you decrease your need for "emergency money" in regards to "running out of money before the trip is over".