I was in the same predicament. I had all my watchers out and got a call from the owner of a pawnshop I check out every now and then. He told me he had an acoustic I should check out. When I got their I held a small Martin Campfire size guitar. It sounded amazing. For $175 I grabbed it. I put new strings an it had the set up checked and enjoyed it for about 2 weeks, until my son showed up and I ended up giving to him. Now I stuck with my old (inexpensive) Takamine. They make some nice guitars but, their price shows it. I'm still looking but the bottom line is, if you can extend that $500 another $100 or $150 (save up if you have to), it will put you in a different ball park when looking at new or negotiating or a nice used one you really need.
Later,
Steven
