Honestly, this is a pretty comprehensive guide on the matter:
https://www.guidetofm.com/squad/building/
I tend to follow this as closely as I can, and it's tended to work for me so far. I never have a senior squad of more than 25 players and like to keep my youth teams (u21, u18s, etc) to a minimum, never bloating them with multiple wonderkid signings every season (I find that ruins the game for me as I get overwhelmed).