Lets get right into this one. Bottom line, there is a very simple answer to the question, “How much should I spend on web design.” The answer is, it depends. With all the hundreds and thousands of options for a web design project, the cost of a site should be directly proportional to the scope of the project.
A simple blog style web design that is created to have family members or a group of friends interact or trade some information can be a very quick and simple project, costing just a couple hundred dollars.
On the other end of the spectrum is a large site, requiring lots of functionality, several applications and services, and being able to handle large volumes of traffic/downloads, etc. A logo and graphic design alone for a site like this can be in the thousands of dollars (Dont be scared, can be and have to be are very different).
As with many things, the best method is to start small and grow over time. If you are currently having thousands of visitors to your site every day, and needing to redesign your site, that is very different than the person who doesnt have any traffic to their site yet. Start small, with a good foundation, and you can expand later with upgraded logos and graphics, functionality, hosting options, etc.
Its sort of like when you first learned to ride a bike. If you were like me, you didnt go out and buy a 21 speed, top of the line mountain bike, and then learn to ride it. You start small, with just a basic bicylce that gets the job done, and get good at riding. See what your style is, are you a street cyclist or an off road person? Maybe you need a more comfortable seat, so you upgrade down the road. Its the same idea with your web design project. Start with the basics. Give it a try and see how things work out. The problems and weak areas with make themselves known, and then you fix them. This ensures you are putting your money where it is most needed, rather than throwing multiple thousands of dollars at a project that is severely unnecessary.