Since Spain is a member of the European Union, the Euro is the official currency.  It's wise to set up a budget and stick to it keeping in mind the current excahnge rate.
For information about current exchange rates currency conversions click here

Options for Managing Your Money
Traveler's checks are accepted just about everywhere, as are credit cards like Visa, Mastercard, and American Express. ATM machines, known as cajeros automaticos, are found on almost every street corner and provide a convenient way to manage funds and receive the best exchange rates.  Ask your bank if there is a fee to withdraw money from another bank's ATM, since commissions can be high. If there is a fee, using the ATM is still the easiest way to get cash, but because of the commission, it is wise to take out large amounts at once (to avoid paying more fees every time you withdrawl small amounts).  Also be sure to check with your bank that you can use your ATM card and pin number internationally.

Just as in the US, if you lose your cards, cancel them immediately. Keep a list of all your credit card numbers, pins and phone number for assistance / cancellation in a safe place.  Also leave a copy with your parents or trusted friends back home who can help you make phone calls from the US if necessary.

It is also important to note that before arriving in Spain, you will want to contact your bank to make sure that they know that you will be in Europe for an extended period of time. If you fail to do this, they may freeze your account (thinking your credit card information has been stolen).
Also, some banks, such as Washington Mutual charge less for transactions carried out abroad (only a 1% commission fee) than others, so it might be wise to ask around at different banks to see what bank can provide the best/cheapest service for your needs abroad.