All clients have a budget, period. But you need to be ruthless sometimes, think of yourself. The client always thinks of their purse, so you must think of yours.
What Paul says is true too, you do more than just design.
Dont cut your nose off to spite your face either. Remember as a freelancer there'll be time when equipment will need to be upgraded, ram, pc software, all add up too. But the cool thing is you can claim this all back on tax and pay a cheaper tax bill.
A fiver extra isnt enough, I could spend that on 3d world magazine, regardless and not think anything of it. Im telling you 35-40 quid is justified in this industry, and thats cheap. I charge alot more when the job calls for it (characters, from design to final rig etc) you'd be wise to do the same at a point.