Divide your budget into three piles:
- necessities (helmet, frame pump, floor pump, spare tubes, tire levers, water bottle)
- nice to haves (cycling clothes, eye protection, etc.)
- bike (what you have left)

Buy a bike that fits you and is comfortable, from the friendliest of the bike stores in your area. Spend LOTS of time test riding it both outside and on the trainer in the shop. Make certain that you are comfortable on it for rides longer than 45 minutes. Buy what you can afford.

Ride that bike for 1000 miles and re-evaluate what you would change. Begin saving for the next bike. When you reach your target, buy the next bike (incorporating all of your lessons from the first bike). Keep the first bike for foul weather/sketchy area riding and as a loaner when friends visit.

Every few years, repeat the process until you no longer have space for furniture in your living room...