Budgeting is the first part of the season and can have a big impact on the entire season. First you need to look over your entire organization and devise a plan of what you want to accomplish for the season. Then after careful considerations and possible alternate solutions to meet your goals implement a budget that meets those needs. Some things you need to keep a close eye and make decisions about follows. Remember you only have $185M to work with.
1. Check your Free Agent report especially at the Major league level. Are they asking too much, do they fit into your plans, are they ML worthy. Looking at mine, I have a position player asking for a $4M contract, he has never played at the ML level, isn't a candidate for the hard to fill defensive positions of 2B, SS or CF and isn't much of a hitter either. He isn't in my plans for now or the future so he will be let go. I also have two pitchers wanting about the same amount each. Neither are Type A or Type B and won't garner a compensation pick in the draft. One is over the hill at 37 and the other is borderline at being a ML pitcher in all reality. So both of those will be let go. As for the minors, I normally keep their sorry asses to fill out the rosters and everyone should as long as they are asking the minimum salary.
2. Next you need to look at the Arbitration report. These players have more than 3 years of ML service time and are asking for a raise, huge ones. The new owners need a little guidance here. A player has two money considerations, the first one you see is for a one year arbitration contract, or you can go long term. To get the one year deal you need to go through arbitration, you have to offer at least 70% of that salary but normally I offer the amount requested, doing this can save problems down the road. You can arbitrate up to three times with a player but after that he can become a Free Agent and may not want to sign with you (normally he won't). Most arbitrate twice then offer a long term contract if they are going to keep him. I usually arbitrate once then offer a long term contract. Since you don't know his arbitration status, call up the players card and check the ML Years on the right side of the card. You can get an accurate count by rolling the mouse over the years. Under 4 means first time, under 5 means second time.
3. Then it is on to checking out the coaches. Egads most people hate this part! This is over in the Admin Office. Check out the Rehires, coaches either want to stay, want a new job within the organization or want to fly the coop. ML coaches can be expensive and hiring new coaches can be a pain in the ass at any level because it takes so long and everyone else may be bidding on them also. I have never budgeted more than $12M and normally budget $11M here.
4. Last but not least, check the Franchise Payroll. At the bottom it will give you the Player Payroll Budget for the season (last years actually) and Payroll Used for this season already (entire organization).
Now that we have an idea for the payroll for players and coaches, don't forget that you might need to get some Free Agents and that can be costly.
Now we can go to the Set Budget screen over in Admin and decide what else we might want to do. The Prospect Payroll is actually used for bonus money paid to draftees and International prospects. This can be set between $6M and $20M.
The next four are for scouting purposes, the first three equates to how well you see prospects projected ratings in the International market and the draft. The Advance Scouting Department lets you see players projected ratings on all rosters. Words of advice for the newbies here, everybody sees current ratings the same, projected ratings is what the player can become but can be very fuzzy. Say a player has a projected rating of 90 in Range, he is currently at 65 and he is 18 years old. His first three years is when he will grow the most but has until the age of 27 to make 90. Chances are he might make it to 85 and no higher and that is a guess. You can only raise or lower these areas by $4M and as a newbie it starts at $10M. For High School and College, you will want to see where you are drafting. If you are drafting in the first 16 picks I might suggest that you budget $14M. If you have a high payroll, you might want to pick one or the other. Internationals can cost lots of money for the great prospects as bidding can go way over the top at times.
Training and Medical allows players to avoid injury and recovery if they do. Most try to get this as high as possible, but newbies start out at $10M and can only go up by $4M.
The bottom of the screen will give you insight of how the previous owners budgeted for previous seasons.
By now you should have a handle on how to set the Budget for the season.