A good, sharp knife is the one kitchen essential you should have. Sharp knives are safer because less pressure is required to cut through food.
A good chef's knife is the first priority because it can be used for cutting and chopping almost everything. You don't have to spend a lot of money to get a good knife, look for one that feels comfortable in your hand. For example, if you have smaller hands, you may want to consider a smaller 8 inch knife rather than the standard 10 to 12 inches.
A paring knife is the second priority, which will be good for all other tasks except slicing bread. For bread, you'll need a serrated knife to keep from flattening the loaf when you cut.