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.

$(speakers)>=$(power amp(s)); $(source+preamp)=$(power amp) than adjust it to your taste and listening needs...