The gear-acquisition spiral is real, and it's rarely the thing standing between you and better recordings. Here's roughly the order I'd actually spend money in, cheapest fix first.
Fix your room before your gear
A cheap interface in a treated room will out-record an expensive interface in an untreated one. Thick blankets, a mattress leaned against a wall, or a couple hundred dollars of basic foam panels will do more for your recordings than almost any hardware upgrade.
One good interface, not a mixing desk
A two-input USB audio interface in the $100–200 range is genuinely enough for most home setups — vocals, one instrument, maybe a DI'd bass. You don't need more inputs until you're regularly recording full bands live, and by then you'll know exactly what you need.
Monitors or headphones — pick based on your walls, not your ambition
If you share walls with neighbors or family, good closed-back headphones will get you further than studio monitors you can't actually turn up. Monitors matter more once you're mixing seriously and need to hear stereo imaging and room bleed accurately.
Buy the thing that removes today's actual bottleneck, not next year's imagined one.
Software you can start free with
- Reaper — full-featured DAW, extended free trial, genuinely cheap to license after
- Whatever stock plugins come with your DAW — most people upgrade plugins long before they've learned to use the stock ones well
- A free tuner and metronome app before you buy hardware versions of either
The one splurge worth it early
A decent condenser or dynamic mic, depending on your room treatment. If your room is untreated, a dynamic mic (which rejects more room noise) will get you further than a "better" condenser that picks up every reflection in an untreated space.