You would need to detail your usecase more (what games do you play, what settings & resolutions?), but I don’t think your CPU, RAM, or GPU are the main bottleneck - it’s the GRAM (the one on you 1060) & the resolution you play on. You can test this by lowering in game resolution to 1280×720.
My first advice would be to look for a used PC in the range of minimum of 300(~500?) monies prioritising GPU (any Intel 10th or AMD Zen2+ will do).
Short of that about the same start but in two parts - go used gfx card hunting & find a good deal (it’s the biggest bottleneck atm & you can switch the rest of the parts later).
If games run slow even on low it’s the GRAM (not GPU) vs your resolution … and playing at 720p is just too retro :).
Perhaps you could get lucky getting like a 6600 or maybe 3070 (prob the price of two 6600?) for a good price? It really depends on the local market what would be the best option available to you.
Maybe think about a gaming-only monitor too (1920×1080, so inferior to your 1440, but vastly less GRAM hungry), if upscaling doesn’t work for you (tho it got better over generations).
With a new gfx card make sure you have a decent PSU.
I wouldn’t bother upgrading your CPU on that mobo unless you get one for free, the prices are always too high - but think about overclocking the current CPU (your CPU & mobo support that).
KNOPPIX in the thumbnail?!?
I haven’t heard that name in such a long time.
Loved that live-booting CDs, rescued so much data.
Latest release was 3 years ago.