I've always stuck to the view that a budget guitar - as long as it's half-decent - will sound better with a great amp than a high end guitar with a budget amp. A lot depends on what you're looking for of course. Once you get past the basic of a guitar or an amp being solidly built enough to be durable - and the guitar feeling good when being played - it all becomes about subjective differences in look and sound. My little 20w Squier Amp I bought for £39 in 1998 (and which is still kicking around, for all the others that have come and gone), back in the days before switchable wattage and when my old Fender Performer 1000 (now long gone) was just too loud when my parents were in, is solid, reliable, and has never let me down. It does everything an amp needs to do - picks up movement from the string via the pickups in the guitar, and turns them into a sound. Not many, likely, are going to choose that sound over a boutique tube amp sound, but what you're paying for there in the end in a tangible sense is the difference in the look of the amp, and the sound. I do think that the amp has something more of an effect on the sound than the guitar - 60/40, 70/30 amp/guitar? Maybe.
With guitars, I don't tend to struggle to find a sweet spot. It helps that budget guitars are getting better all the time. Also, my aesthetic preferences swing firmly to Fender styles, and solid colours over 'natural' finishes. I dislike fancy woodgrain finishes and such. This does very much mean that I can find guitars that do everything I want in the Fender Mexican range, or equivalent. The only real limiting factor that often pushes me beyond budget is that many of the guitars I really like simply aren't available left-handed below a certain price. If I had a grand to spend on a guitar and an amp, I'd be looking at a guitar around £400-£450ish, and an amp in the region of £550-600.
My current amplifier is a Vox Valvetronic AD120VT- the big, ol' blue cloth original with the 2x12", looks like an AC30. In due course I'm going to sell it on. Sounds fantastic, but I really only use one or maybe two of the Fendery sounds on it. As I don't these days play out (and much as I don't like to think it, probably never will again, now in my late forties), it's just not ideal for me any longer. I even have the rare VC12 footboard for it, which will also be sold. The plan is to replace it with a small tube amp. In an ideal world, I'd love a tweedy Fender Pro Junior type 15watter, but I know I need something smaller. I'm going to push the boat out and pick up one of these Supro 1watters in the nice tweed finish:
In the event I ever played out again, I'll either look into the bigger version of this Supro, or I'll go the route of those pedal-amps. I'm about to embark on the task of selling off two third to three quarters of my guitars (I've owned around fifteen over the years, currently have about twelve), cutting it back to just the US Strat, the CIJ Tele.... and *maybe* the Epi Les Paul (though the Epi staying is predicated on not being able to sell it for a decent price, I'm really quite over Les Pauls tbh. Love the sound of them played by other people, but that sound, it turns out, only comes to my hands via a Tele....). I'm planning then on using some of the cash realised this way to pick up a few new guitars. The ones I have my eye on are a Godin 5th Ave archtop, Gretsch 5240, Fender Player Strat in Tidepool, Vintage V52, and *maybe* a Gretsch 2622 if I can get away with it.... I might actually reverse the Gretsch order, though, as the 2622 in gunmetal is really calling me. I'm seeing it with some red and white pinstriping on... I'd love one of the Tidepool Player P basses as well. Going to be keeping my Brandoni P Bass, which is a three toneburst with rosewood (matches my old US Strat nicely).
Suffice it to say my "dream guitars" nowadays are all pretty much budget models. If we won the crazy-money lottery win thing, I'd maybe think about a couple of top end Gretsches from the 6xxx series, though even then I'd probably want the cheaper models if I ever did get into playing out again.
TL/DR: I'm a total advocate of buying a decent guitar and a great amp.