How do you determine how much to spend on speakers

I would put the bulk of the money in your speakers as they have more to do with sound quality then your electronics, i.e. $3000 speaker will sound better with 2k of electronics than vice versa. Also, make sure that you audition all your perspective gear with well recorded cds you are very familiar with.

Garbage in, garbage out. You cannot fix poor signals downstream. As a rule of thumb, add up what you'd spend on a CD player, tuner, turntable, and tape deck. Whatever that amount is, should be about what you'd spend on the speakers. A balanced system sounds far more musical and enjoyable than having too much invested in source, speakers, or amplification. 30% on source components, 30% on amplifier and preamplifier, 30% on speakers, 10% on wire (interconnect, power cords, speaker wire).
If you have a total of $5k and don't care for analog then you'd spend roughly $1500 on a CD player and tuner, $1500 on amp/preamp (maybe an integrated?), $1500 on speakers (including stands if they're not floorstanders) and $500 on all the wires you need.

Budget more on the front end and then find the best speaker, instead of the opposite way around. Speakers rely on what is fed to them. But best suggestion of all, you should listen to see what you like.

I initially spent 70% of my budget on speakers, and spent the balance on a receiver and cd player. I basically threw my money away on the electronics. And because my amplification and source weren't up to par, I never realized the full potential of my speakers. Now I'm up to my third rig, and finally upgrading the speakers.

My rec. is to spend as much on speakers as you "have too", but not at the expense of the other electronics. Even though "it's [$$ on speakers] an investment" it's silly not to let them [speakers] shine with good electronics. I sure wouldn't spend more than 50% on my loudspeakers. you can find $2-$3k speakers that will shine with $5 worth of electronics, if you're careful in selection. Look at the Vandersteen setups in a lot of hi-end shops. I think a saw a pair of Vandersteen 1C's (<$1k) driven by $5k in electronics. And it was a "good" setup.

And look what setup is suggested to people wit $1k budgets. 33% one source, 33% integrated amp, 33% bookshelf speakers. Listen for a while, then upgrade DAC or TT-stuff, or get better wires, then maybe add a musical subwoofer down the road.

So spend what you "have to" at this point. You'd upgrade later anyway, unless you are good at modifying/tweaking speakers.