you can cut your squares 4" then after making your 1/2 square triangle square it up to measure 3 1/2" that would be the size of the 1/2 square triangle using a 3 7/8" square.
anytime you want to make a 1/2 square triangle you take the size of the finished block, add 3/8" then add the 1/2" Seam allowance. in otherwords, if you want a (finished size) 1/2 square triangle block to measure 3" you start by adding 3/8" then add 1/2" seam allowance (which is 1/4" on each side=1/2")...so you start with (2) 3 7/8" squares (or round up to 4") draw a diagonal line across one of the squares, stitch 1/4" on each side of the lines, cut on the line, flip open and press...2 - 3 1/2" 1/2 square triangles completed.