How do you determine how much to spend on speakers

I post this only because I don't find this particular advice anywhere else here.
The phrase "you have to start somewhere" is very true, but it assumes later upgrades. Every audiophile I know has the same disease. Don't overlook that. If you are just starting out, you can save lots of money by doing it very smartly. I guarantee you, when you have bought what you think is the best you can get at that time with the given amount of money, sometime later (and probably shortly thereafter) you will start second guessing your choices, and get the itch to upgrade. After two or three years or so, several total system changes, and two or three times the money you initially spent, you may look at your system and say to yourself, "you know, if I had thought of my current system's components two years ago, I could have bought them with the original 5k and saved a lot of money."
You say in response to the above, "yeah, no kidding, lots of audiophiles do that; it's a process you have to go through." And I agree to a point. But my advice is to try to skip all the components in between your "starter system" and your final (is there ever one?) system. You do that by buying the best "low-hi end" components you can find used for the cheapest amount (i.e., Polk RT35i speakers, creek 4330 integrated, some monster wire, and a 200 dollar CD player, all for less than a grand). THEN, after listening to that for a good 3 months, you have a frame of reference of sound from which to compare, and most importantly a system you can home demo components on and hear a comparison. Even if you go listen to every item at all the local dealers there are far too many variables to change the sound from when you listen to it there to when you get it home. Again, you need a frame of reference to start from.
I wish someone had offered me this tpe of advice when I first began. One other tidbit; if at some point you are nearly satisfied with your system but you feel it is missing something specific (like a subwoofer, or good cables, or whatever), don't settle for something well below the quality of the rest of your system. You will just end up upgrading it anyway soon thereafter. Buy the best you can afford in line with the rest of your system.
Best of all, the whole damned process is a load of fun, which ever way you do it! Good luck. (And btw, back-issues of the Absolute Sound have reviewers' choice systems, to include their budget systems. You can get a lot of good ideas from there).

Not bad advice, Jimmy. It would also make a great bedroom system when, (and if,) you go forward. Charlie

It seems that Jimmy2615 has reminded us of the "one must walk before they run" side of life.

I revamped my system incrementally, assuming a $5k budget, over two years. I had a beefy old NAD receiver, a slightly modded Rotel 855 CDP, and DIY (Boston Acoustic designer help) 2 ways from Peerless drivers. Sounded fine for years.
I tried designing a three-way, but got too frustrated, so started the hunt. Knowing the critical nature of room-loading a transducer, I decided to find the best speaker I could IN MY ROOM. Started with Paradigm Powered Monitor, then Thiel 2.3, then Ariel 7b, then JM Labs 820 (?), then B&W803N. Finally I tried the speaker I'll live with forever.
Cost me $8k wholesale. I cried when I heard them.
Dealer told me to get a cleaner amp (especially pre) to drive them. Lots of buzz for the Audio Refinement Complete Integrated at the time. I borrowed one, and was astounded at how more musical and CLEANER it was than the NAD. Not enough powerm, though. Dealer recommended Alephs with these speakers. So I found used Aleph 2s. Now I could REALLY hear the noise and grit upstream! Auditions between ADCOM GFP750 and Aleph P proved doubtless that Nelson's REAL iteration was the way to go, despite cousin Wes's lauding of the ADCOM.
So that left the front end...which was actually the hardest part. Trials of Bel Canto, Arcam 9, Audio Refinement CD, Planet proved to be less musical than my old lowly Rotel!
How could this be? I added a Neuance under the Rotel, and now was even more amazed at how a 10yr old CDP could boogie.
Yet the digititis and glare were all way too much. Yet the Bel Canto needed a dimmer up top, and the ARCAM danced with two left feet...the ARC put me to sleep.
So I stuck my friggin neck out and bought a new EMC-1 with something called a 24/192 MkII DAC at cost from a Danish dealer. My God...I'm done. Ok, I'm still screwing around with cables, and I had to buy a new tuner, after all, and make my own dedicated lines and PCs (thanks, Sean, et al).
So the $5k budget grew to about $18 by the end...for $30k retail value.
Took two years to do, and I had to learn a lot.
One mentor/dealer now flew the bricks n' mortar coop and works for Lenbrook. I remember he once whispered something like "vinyl" at the beginning. But Redbook now sounds SO good I'm selling my AR table and not even thinking about SACD, nevermind DVD-A or combi-players. And boy am I buying CDs on sale!
Thanks, guys, for all the help.
Hope this helps the threadhead.
In a nutshell: find transducers that you fall in love with while auditioning with appropriately neutral electronics.
Then match the electronics and cables to the power and spectral requirements of your system as you deem satisfying musically.
The NAD receiver and 2 ways do nice duty in the family-room HT system. But what a difference!
Good luck.

I recently replaced my very old stereo system, and was confronted with the same issue, how to allocate limited funds among the components. I did not know much about modern stereo equipment, and had the belief that I should put most of the money in speakers, because they make the biggest difference.

I first read up on stereo equipment, and then went to a local stereo shop last fall that carried Creek, Acoustic Research, Krell, Cary, Audio Physic, Soliloquy, and California Audio Labs equipment, among other things. I listened to various combinations of equipment at various price points, trying as much as possible to compare components by listening to setups where everything was the same except for changing the one component I was evaluating. What I learned was how much difference each component can make to the sound. For example, I listened in a small room to the Audio Physic Virgo II speakers (appropriately positioned) through an entry level Creek solid state amp, and thought the speakers were of average quality. I then listened to the same speakers but with a Cary CAD-300SE amp, and my reaction was WOW. I could not believe they were the same speakers. I also had assumed that choosing a preamp would make little difference, as I figured a line stage preamp simply switches the source component that is amplified, and controls volume. I now believe differently. I listened to the setup I purchased at home with 6H30 driver tubes in the preamp, and then substituted a different type of 6922 tubes recommended by the manufacturer of the preamp. My system with the substituted tubes in the preamp went from one I found highly satisfying, to a system with reduced soundstage, and thinner more analytic sound. I made similar observations about each of the other components. That taught me that the balance of the entire system is critical. The sound coming out of the same speakers can be completely different depending on the rest of the system.

Based on my limited experience, and the very interesting and informative remarks of those with greater knowledge and experience than I, my current thinking on the subject is:

---The balance of the system, and compatibility of each of the components, is critical. If the goal is to buy a system where none of the major components will be upgraded, do not spend too much on any one component (including the speakers) at the sacrifice of the other components.

--- If the goal is to buy a system where major components will be upgraded one at a time, by spending more on a particular component, it may not be necessary to upgrade that component, and it will save money in the long run. If this is the objective, at the $5,000 price level for the system, it may make sense to spend a greater percentage of the total on speakers, depending on the particular products that are chosen.

Best regards,