Start with what a new customer is worth to you, then spend an amount you can afford to lose while you learn what works. A monthly figure divided by 30.4 gives the average daily budget Google asks for.
How do I work out a starting budget?
Take what you can pay for a new customer, and multiply it by the number of customers you want from ads each month. If that number is more than you can spend, start smaller and judge by cost per result.
How does Google treat my daily budget?
Your daily budget is an average, so spend can run above it on a busy day. For most campaigns you will never pay more than twice the average in a day or 30.4 times it in a month.
When should I raise the budget?
Raise it when a campaign is converting at a cost you are happy with and is limited by budget. Add a little at a time and watch the cost per result for a few weeks.
When should I cut it?
Cut a campaign that has spent well beyond what one customer is worth with no conversions, after checking that conversion tracking works. Pausing is easy to undo, so pause first.