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Young Couple traveling to Italy and Spain - 2 weeks

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I was looking for some feedback on an itinerary/budget for an Italy and Spain 2 week trip. The itinerary is:
-Fly in to Venice (2 nights)
-Take train to Florence (1 night)
-Take train to Rome (4 nights)
-Take ferry to Barcelona (4 nights)
-Take train to Madrid (2 nights)
-Fly home

The budget I have come up with is not for plane tickets, ferries, or trains. It is for hotels, food/drinks, sight seeing, light shopping and getting around within the cities. We're looking for 2 star hotels for around 125 USD a night (is this reasonable?), we don't expect to eat luxuriously, and we want to see a moderate amount of sights. Altogether we would be looking to bring about 4200 USD total for the above expenses.

The breakdown:
- $600 or $40 per day per person for food
- $930 or $61 per day per person for hotels
- $560 or $37 per day per person for the other expenses

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