-- Della, Newport
Every time someone books one of my tours, this is one of the first questions they ask. What type of vacation you are planning can make a slight difference, but overall there is a general rule -- not too much and not too little. What exactly does that mean? I tell those traveling to Europe to exchange anywhere from $100-$200. There is no need to carry any more cash than that -- both for safety and the convenience of using your debit and credit cards.
Use cash for small purchases like street vendor foods, open-air markets, and small items -- use your debit and credit cards for everything else. You can easily withdraw more cash from an ATM while in Europe -- they are everywhere just like here. Just make sure to notify your bank and credit card company about your travel plans.
There are pickpockets in Europe -- the same as anywhere else. I recommend keeping the same habits and routines you use to avoid theft at home. I have watched too many people lose their wallet or purse because they have changed their routine.
This may come as a shock, but I dislike money belts. I have stood in countless lines while in Europe and watched as grown men and women pull up their shirts and unbutton their pants just to pull out a credit card or a few euros.
This distraction is a pickpocket's dream, because while you're busy fiddling with your money belt he is stealing your camera or other items. By sticking with your normal routine you can devote more time to being vigilant. If you are traveling as a pair you can also split the cash and cards, so in the unlikely event one of you falls victim to a theft the other will still have means to purchase goods.
Try not to stress out too much -- remember, you are on vacation.