I have never approached system building by budget allocation. I recommend instead that you get seat time in front of several different systems, of different types, to get a better sense of what kind of system (tube, stats, horns, big or low power, vinyl and all that comes with that if you want to go down the rabbit hole).
Although I hear differences in wire, I’d make that a less important factor for now. As others have said, you have to work with your room and maximize performance within it, given your objectives as well as the limitations of the room itself. Some people get way out ahead on room treatments- I use those too, but take a pretty minimalistic approach, using bass and corner traps, and rely on rugs and other things in the room and set up/placement to address acoustic issues to the extent I can.
Your sense of what sounds "right" will change with experience. Don’t limit yourself to demo discs of sonic spectaculars-- listen to "regular" source material.
My current system has been evolving since around 2006-7 starting with some good fundamentals that work well together (extremely sensitive speakers and SET power amps. This is all a matter of personal preference, and may not be the ideal for someone else’s ears).
But where an otherwise very good system was taken up a notch was simply a change in cartridge, a different power supply rectifier tube and other "small" differences that help "tune" the system to sound more lifelike to me in the overall combination of components in the room.
With so many variables, it is very hard to predict on paper how to "synergize" the combination of components, let alone allocate budget to each item of the combination as a theoretical way of predicting how it all comes together. That you must do by ear, and, if possible, with the help of a good dealer willing to visit your room and make some suggestions/help on placement, set up and dialing in.
This is not plug and play; it takes time for you to educate yourself about what’s out there and what combinations of equipment seem to make "magic" for you.
Treat it as a learning adventure. None of us is ever really "done" but much of the pleasure, to me, comes from learning and improving results over time.