Performance budgets are an important tool for ensuring your site is delivering a great user experience. Steve first experienced performance budgets while Head Performance Engineer at Google. The practice of using budgets to track performance took off with Tim Kadlec's blog post Setting a Performance Budget. The idea is to identify your performance goals and track the metrics that help you achieve your goals.
At SpeedCurve, we give performance budgets first-class status by tracking them in the Site dashboard. Here's an example of tracking a budget for image size.
Before setting your performance budgets, you first have to be monitoring your user experience. Only then can you set budgets and thresholds for improving your baseline user experience. This also allows you to quantify the improvements you're making and share success stories across the organization like "We just improved start render by 32% by reducing image requests to half the budgeted amount".