Paris and Madrid for 50€ a day for 4 people?
There are also churches to visit, and some free concerts. Spend a small amount getting the small magazine Pariscope, as it lists numerous events. Paris Free Tour would be good, but I hesitate to recommend it, as a tip would be reasonably expected.
Unless the original poster has an apartment, I seriously doubt kitchen facilities are available, in a hostel or anywhere else.
Having said that, and being skeptical of this budget, I should add that wine, for example, can be very cheaply had from a local market. I think it is Ed Epicerie which is a chain of cheap grocery stores.