If you are trying for a 4 inch "finished" square and a 4-1/2 inch "unfinished" square -
Cut the center squares 3-3/8 if your 1/4 inch seam is "exact" -
if you tend to make "full" 1/4 seams, go with the 3-1/2 inch square.
Your center square is "skimpy" to begin with at 3-1/4 inches.
The "finished" seam/side lengths of the sides of the center square are (square root of 8) which is approximately 2-7/8 inches. If you add 1/2 inch to that, that is approximately 3-3/8 inches.