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3 days Madrid Itinerary....?!??!

hi... me and my cousin are traveling to Europe in August...first stop Madrid for 3 days... here is what we got for Madrid.... friday - get to Madrid at 9am, train to hostal, check in (hostal close to Plaza del Carmen ) Mercado San Miguel for lunch,walk around Plaza Mayor, dinner saturday - breakfast, Museo del Prado, plaza los Cibeles, lunch, Parque del Retiro, Puerta del Sol, tapas night, (important churros and chocolate) sunday - breakfast, Palacio Real, lunch, Catedral Almudena, museum Reina Sofia (free 3-7pm), dinner (maybe show de Flamenco) any advise...... we are on a budget, thats why we put Reina Sofia in a free day, just to pay for el Prado, I think friday is free to late in the afternoon, dont know how tire we will be that day so thats why I didnt put it the first day. anyone can tell us good cheap places for lunch and dinner close to the areas that we are.... we are staying at 360 hostel centro, close to Plaza Carmen....
thanks in advance

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