Setting a budget is the first step of the season and could be the most critical later in the season. Even veteran owners get it wrong. Several factors can play an important part on how one decides the budget. The players guide does help and explain the different categories. However, one wrong calculation or misstep during the season can leave an owner out in the cold and hoping for help.
Player Payroll: Basically this is the category from which players get paid. You must allocate enough money to meet the payroll for the entire season. Some things to remember, Free Agent salaries and bonuses is paid from this area along with arbitration monies paid. One thing many forget is that players who are promoted get more money at each level and these costs must be allocated also (I usually make sure I have #1M or so for that at the end of the season).
Prospect Payroll: Basically this category pays for the bonuses paid to International Free Agents and drafted players. Their salary however is paid from Player Payroll. If you are going to dabble heavily in the IFA market, lots of money needs to be allocated to this fund (ok, so $20M is max but it is possible to put more here). It is not unusual to have great prospects go for $15M to $20+M.
Coaches Payroll: Coaches salaries are paid from this category. Coach hiring remains one of the most despicable things in this game. Normally $11M to $12M will get you a nice staff, however it is a dog eat dog world out there.
Domestic and International Scouting: Money allocated in these categories determines how well you see the possible future ratings of potential players. The more money spent, the more accurate you see them. One thing to remember about player ratings, the current ratings are seen by everyone the same.
Advance Scouting: Money allocated in this category determines how well you see the possible future ratings of any player on a roster. By the way, future ratings only apply to players whose ages are 26 and below. Most players do not advance very much once reach the age of 27.
Training: This category really means something else entirely. More or less it keeps players from getting injured supposedly. It doesn't help in advancing to their future potential, well sort of. It is suppose to help veteran players from rapid decline also. Money spent here really isn't realized until rollover the following season as this is turned into several different ratings boosts for players IMO. It does pay for that much needed whirlpool, bandages, Bengay and condoms. It doesn't help in beer brawls, tripping over the family pet and such.
Medical: This category helps recover players faster when an injury occurs. A three week injury could become 10 days with a high budget. It also determines ratings loss and or gain from injury.
If you put too much in one area and not enough in another, money can be transferred from one account to others using the transfer budget option. However there is a steep price for doing that.