Well, London and Paris are probably the most expensive places in Europe (even though Scandinavia comes close as food is so pricey there). A place that I have stayed at in London for a few times and which is clean and affordable and in a nice area (Bloomsbury, not a lot of hotels, but lots of universities, amongst them the one I got a Masters degree from) is
this hotel. If you want to stay outside of Paris and commute into the city (which comes at a cost as well), you might as well stay at Val d'Europe, the development that is part of the larger Euro Disney development. There are a number of hotels in that area, also budget ones. No need to stay at the overpriced Disney ones. It is one train stop from DLP and about a 45 minute train ride into the city.
But if you would rather go to German yourself - as I said, that's a trip that can be done for less money than Paris and London (even though I love both cities myself and can understand people wanting to go there very well!). My suggestion would be to fly into Berlin, spend a few days there. Obviously lots of history to see, but also lots of fun, modern and hip stuff. Then take the train from there to Nuremberg - see medieval castle, go on a day trip to Rothenburg, there is also a toy museum and the German railway museum and maybe even spend a day at
Playmobil Funpark - not really a theme park, more a large adventure playground. The take the train further south to the Alps, stay either in Füssen or Garmisch-Partenkirchen. See Neuschwanstein and maybe do a hike (for example combined with a cable car trip) in the mountains, then go back a little north from there to Munich and end your trip there. Munich has a fantastic museum of technology, the two real castles of the King of Bavaria, BMW Museum, the Olympiapark with a television tower that has a fantastic viewing platform (Berlin has one, too).
The train rides would be between 4.5 and 2 hours, so none of them too long. It can all be done on public transport. I helped friends organise a similar trip some time ago and they seemed to really enjoy it. They used Priceline for Berlin and had a four star hotel right in the city center for 62 $ per night. Last summer I pricelined a hotel in Munich (not directly in the center, but in a residential neighbourhood which I knew well) for 52 $ per night.
But I guess, if you go back to Germany, you would want to visit where you used to live? I remember you told me once where it was, but I forgot, sorry!