Your budget should be based on your business goals. If you weigh up the number of new clients/customers you need to bring in to grow or maintain revenue, compared to your conversion rate, then work out how many click throughs you need per day to reach that goal – your budget should allow for that (remember to keep search volumes in mind) plus a small margin for safety.
The most important factor in deciding your budget is efficacy vs affordability. If you’re saving a lot by limiting your budget then you may not get the traffic levels you need. On the other hand, if you are spending more than you can afford, your success won’t be sustainable.