I would look for an aluminum framed baitcaster, like the Lew's Speed Spool, Abu Garcia Revo S, Shimano Citica E or G, BPS Pro Qualifier or Daiwa Exceler. These reels will fit in your budget and hold up to a lot of use. As far rods, spend the remainder on a medium powered graphite rod, 6'6"-7'. If you have an Academy near by, look at their All Star rods or Ethos rods. The Lightning rod as mentioned above will work, Lew's makes some decent rods and BPS has some good rods for not a lot of money. You can always upgrade the rod later and your reel should still be going strong. Also, resist the temptation to buy a rod and reel combo that's already put together, you can usually get better quality components if you buy them separately.