If you're still looking for advice, here's the basic breakdown of what I spent for 10 days:
Airfare: $1400
Japan Rail Pass: $300
Accommodation: $300
Everything else combined: $500
So, put it all together and I spent around $2,500, give or take.
That was for ten days split between Tokyo, Kyoto, Nara and Hiroshima. The rail pass is a must if you plan on traveling extensively. Plus, the Shinkansen is an experience in itself.
Hostels are great fun if you've never been to one. Yeah, you share a room with strangers, but they're all going to be travelers from all over the world, just like you. In all the places I stayed, I met people from the UK, Ireland, Australia, Israel, Spain, France, China, India and a few others. I'm usually on the shy side, but a lot of these travelers were really easy to get along with, and made for instant friends. So it's not only much cheaper, it's actually a lot more fun too. Especially the small, privately owned places, where the Japanese owners share a similar passion for traveling.
It's worth a thought anyway, paying $25-30 a night (or less!) compared to $60-100.