It depends a lot on your goals. A good interim goal is to achieve and maintain competitiveness at local contests in an appropriate PAMPA class, plus Classic Stunt. With a good engine, many classic legal designs are competitive in any stunt event. This lets you fly 2 events at one contest with the same plane. Each official flight becomes a practice flight for the next official.
Some good designs (among many) include the Nobler, Smoothie, Oriental, Skylark, Skylark II, Pegasus, Thunderbird and Thunderbird II. Designs with fuselage mounted gear sometimes build faster, lighter and are more rugged vs. those with wing mounted gear. Trike gear models usually build heavier and are not as "stooge friendly" as tail draggers.
Build it from a kit or ARC/ARF (if available). It's faster and costs less, even if you have to replace some wood and hardware. Finish it with an iron film. I still like Monokote, but some local guys have switched to Ultracoat. If you paint the fuselage, use spray can Lustrekote over a brushed nitrate or butyrate dope base (or brush finish the whole fuselage with silkspan and butyrate dope).
Use an OS FP .35, .40 or LA .46 (the .46 is my favorite, needs 4.5 to 5 oz. of fuel per pattern). Buy a good handle like a Big D or the new Brodak handle and have at least 2 sets of lines (one for back up). You may have to replace the lines after a season or 2, but a good handle will last for years or even decades. A .35 to .46 powered classic rig can be locally competitive against hi-zoot .60 to .75 powered models, while costing only slightly more than a .25 size model.
The smaller .25 powered model, though fun to fly and easier on fuel, will probably not be competitive against the larger models. However, it's an excellent choice if casual sport and fun flying is your goal. A LA .25 powered ARF Flite Streak makes a good warm up and "dust off" model at the beginning of the season, or anytime you just don't feel like flying a larger plane. If you plan on flying it in the P-40 event, modify it with 2-wheel main gear, 2 inch dia. wheels and a stooge friendly tail wheel or skid. That makes it much easier to fly off the grass circles usually assigned to this event.
Expect to spend $500 to get up and running with a benchmark setup: good flying "forty size" model, reliable engine, handle, lines, stooge and field box (cheap fishing tackle box) with fueling syringe, plug liter, 4-way wrench and other basic tools. Once this is achieved, work on getting a back up engine and "the next model".
Avoid crashing. It's expensive! If things don't feel right, don't force the issue. I've seen models splattered and even engines destroyed in crashes. As long as you land with the model intact, there is always "the next flight". Once you have achieved solid footing on the above "plateau", find ways to earn or save extra cash so you can maintain it and possibly look at putting together a more up-scale rig. Good Luck! EWP