How do you determine how much to spend on speakers

If I were you I would look at a Madisound Kit or similar if you are DIY inclined as this will save a heap. Zaph Audio/ scanspeak collaboration with Madisound the ZRT is a good bet. I would look at amplifiers next ME, Pass Labs, Accuphase, ARC, VTL second hand are sometimes a bargain. I would run a decent pro PC sound card with XLR out. I use an entry level ASI5111 that EATS most CD players up to $5000. Your computer and its music library are your source. Just thinking aloud you could run a SERIOUS amp with a passive volume control if it has XLR input and out. That is what I run on my PC only I run XLR to RCA out to a flea powered hotted Rogers Cadet III [8w/rms]into ProAc super Tablette with twin 8in bass bins a side run with a custom class A Amp
Loud enough for computer near field monitoring but not a lounge room but I can use the Tannoys for that. $5000 could build you a Killer system as you only need 3-4 components assuming you have a computer. Hope this helps

In 1985,I bought my first hi-fi stereo system at a trustworthy high end local dealer. I was pretty much a novice at the time. I told the dealer my budget was $3000 and he brought me in at $2800 as follows:20% on speakers (Spica TC-50s w/custom stands);7% on Receiver(Rotel 2 x 50wpc);16% on source (Rotel CD player and a used Meridian DAC); 7% on used subwoofer system (10" passive woofer in seperate enclosure and 350w bass amp); 3.5% on speaker cables (a pr. of used MITs)and a whopping 57% on interconnects ($100 on analogs and $1400 on a Goldmund coax digital running between the CD player and the DAC). The dealer did a blind demo for me of the system with and w/o the Goldmund. There was a large improvemnt w/ the Goldmund. I have never again had a cable make such a big improvement.

In 1997 I went back to the same dealer for a new system with a $20,000 budget. This time I spent 50% on speakers (Wilson Audio Cubs w/ custom Sound Anchor stands); 37% on Sonic Frontiers tube preamp and matching 2 x 105wpc tube amp; 7.5% on source (top of the line Sony SACD/CD/DVD player); 10% on Sunfire True Subwoofer; 2% on surge protector/line conditioner and 5% on spkr cables (Audience AU/24), interconnects (Transparent and Wireworld)and XLO balanced cables between the pre and the amp.

Depends on what source you want. Assuming you are going with a cd only - spend no more than $500 there, between $1000 and $1500 on the amp (stay integrated) and between $2000 and $2500 on the speakers. Keep only enough left for speaker wire (#12 or #14, 2 conductor cable - copper - decent quality, i.e. Belden or any other major manufacturer) and decent connectors (i.e. banannas or spade connectors)- you should be able to keep this cost to much less than $100 assuming you don't have 100 feet between your amp and speakers. Do not waste $$ on expensive cable power cords or power conditioners (although a decent surge protector is not a bad idea). Pick your speakers first and get enough clean power to drive them. If you are happy without high volumes and deep low end you can do very well with your budget - particularly if you go with bookshelves. Audition your options and listen for more than a few minutes - if you can't hear the difference between two options without the salesman telling you the difference, then go with the lower cost and reapportion your budget as you go

Well recently I just bought my first system. It consists of the latest Olive Opus 4,
Bel Canto DAC3 and ATC Active 20s with PsAudio's Power plant premier. So you can tell that I've spent like almost 60-70% of my budget on my speakers but then again they are active so I ended up saving quite a bit. My original choices was an Icepower amps from Acoustic Reality and Wilson Benesch's trinity or Discovery. Buying active speakers saved me a sizeable chunk of money so maybe you should go active too with that budget. Consider getting a class leading DAC like Benchmark's or BelCanto's and pair it with a basic transport, and maybe active loudspeakers from AVI, ATC or Dynaudio and you will have a great value for money simple set up.

Don't use price or allocation formulas to build a system. The key is balance, synergy, and value.

You won't know where to allocate your funds until you are actually auditioning units. A good dealer should have units at a number of different price points. This is about listening and about developing good instincts. You should have CD player X and Y, amp X and Y, preamp X and Y, and speakers X and Y in mind and then it is up to you to organize them into an arrangement that sounds good and meets your budget. Also, think about how often you are likely to upgrade and what kinds of compromises you are willing to make. Do you need a lot of bass or would you rather have a more refined but smaller speaker? Ect.

That said, I think in a system like this the speakers should actually wind up being the least expensive component. I would spend $600-$1,200. You would be better off getting a capable but inexpensive speaker now and laying the foundation for a future speaker upgrade with a solid amp and preamp. Build around a really good preamp and amplifier. Split what is left between your digital source and your speakers.

The reason is that, I know for a fact that there are $650 monitor speakers that have the detail, refinement, and imaging to keep up with a much better amp and preamp, but the reverse is almost never true. Pairing insufficient amps and preamps with higher end speakers usually results in an unpleasant system because you wind up just hearing more of the mediocre source components and the purpose of having the better speakers is defeated. Especially if your source is digital, you are going to want to have a really good digital source before thinking about your dream speakers.

For example, I have about $7k of amp/preamp in front of my B&W N804s that cost me around $4k. When I got those speakers I was using an old integrated amplifier (Audiolab) for my preamp and the system was just harsh and unpleasant. It wasn't until I parked about $5k of preamp in front of those speakers that they sounded spectacular. Until that point, they were like having a microscope on my mediocre integrated. This is the type of situation that creates upgrade fever and it can be avoided.

Slapping really great speakers on a system that can't keep up is sort of like that Woody Allen joke: "boy, the food here is really terrible, and the portions are too small." Why would you want more of something that is terrible? Do the front end stuff first and just find some speakers that sound good to you to start.