Currently, upgrades (and construction) cost a huge amount of money. Maybe my planetary budgets will grow once the game is further developed and balanced, but at the moment it is hard to run a positive income of more than a few credits.
Budget is not an issue if you research the correct technology. You get later in the game one is making plenty of money. This is all part of the game, learning how to play and how to adapt.
With that being said yes, it would be nice if ships would auto upgrade or at least have a check box if you want the ship to upgrade automatically in the shipyard selected once a newer model of the ship becomes available.