|Is it for you?|
A financial and personal decision made by budget travelers everywhere is... "Do I save money on a dorm room or splurge on a private?"
Hostels often have an option of dorm-style (sharing a room with people you don't know), or private rooms. Traveling by myself, I have to say that dorm rooms are not only the cheapest option, but help you to meet people. When I backpacked alone in Europe, I stayed exclusively in dorm rooms, and (except for Venice... a city truly made for couples) never lacked for people to eat dinner with, get drinks with, go out and have fun with. You definitely want to make sure you know where your valuables will be stored -- many have lockers, or front desks that will hold a small collection of variables (which I wouldn't do, but go with your gut). I have definitely slept with my backpack in my bed before!
If you are with a friend, in a lot of places I have found that splitting a private room is just as inexpensive, and can be nice when you are suffering from travel fatigue (that feeling that sitting on a couch in silence eating cereal in PJs is vastly superior to seeing famous works of art or lavish temples. It's a shitty feeling). Having a private room was especially nice when B and I were doing things like packing a box to ship to the US, getting really ill, or doing a crap-ton of shopping. The space and privacy restored my energy and made me feel comfortable whenever I felt the need to do a massive (massive considering I was living out of a backpack) reorganization of my stuff.