If you're in a position that allows you to spend a few hundred dollars on an audio system, you really ought to do it. I think it is the most often overlooked, critically important part of a gaming setup. A lot of resources are spent on making modern games sound great. You need to spend some resources on your end to get the payoff. 

The biggest jump comes when you go from TV speakers to just about any kind of discreet audio system. It's night and day difference.  You can of course keep getting better and better from there. But, that initial improvement in audio performance that you get when you get rid of the TV speakers is huge.

Neumann KH120...LG Soundbar.

Headphones. I don't need no stinkin' fancy surround sound speaker system.

Still my ancient JBL box set (5 satellites, 1 center, 1 active subwoofer and 1 passive subwoofer) I bought for my home entertainment 20 years ago).

Connected to my old AV receiver Yamaha RXV-795RDS until 2012 and with my current AV-receiver Onkyo TX-NR636 7.2 since then.

To be fair I do sometimes wear headphones that give a surround sound and yes they are much better, I hear things that the tv doesn’t seem to give off and they also give the direction the sound is coming from. However I find them a distraction, I know it might sound weird (pun not intended) but I play much worse when I have the headphones on.

Bang for the buck stuff. TCL 6 series screen, Vizio soundbar + sub, and HyperX headset.

Yes, headphones also make a big difference.  I find it strange that you play worse with them though.  I definitely play better with headphones, as I can determine the position of an enemy much better.  Maybe it's cuz you're not used to them.

I have a Sony HT ZF9 dolby atmos system. The rear speakers I'll have soon as well. It sounds amazing for games, movies and music.

Yamaha receiver... And a full 5.1 Dynamics Polaris series 2.

Amazed at the amount of people with... Lord forbid. Sound Bars.

https://www.sony.jp/headphone/products/MDR-HW700DS/