At a guitar store, a salesperson might recommend a $2,000 guitar because of how good it sounds. Have no doubt, it will most likely sound amazing ... but you don't need it yet.
To determine how much you should pay for a guitar, you have to figure out what you are going to use if for. We've categorized all potential guitar purchasers into three types of players, in order of the cheapest to the most expensive instruments: road warriors, porch-sitters and rock stars.
The Road Warrior
The road warrior takes a guitar everywhere: to the beach, to the pool or to a campfire. Because the guitar will be exposed to so many of the Earth's elements, you want to make sure it is robust and durable. Primarily, though, you want to make sure the guitar is not expensive. Just as you wouldn't want to drive your Rolls-Royce into the ocean, you wouldn't want to take a fancy $1,000 guitar to the beach and get it all sandy and dirty. So get a guitar with a laminated veneer top. Then, you're pretty much in the cheap-zone. Don't spend more than $200. In fact, a cheap guitar from a pawn shop may do you just fine.
The Porch-Sitter
If you're going to be playing around the house (or on the stairway of your dorm) and aren't going to be traveling with your guitar much, you are a porch-sitter. You should be willing to spend a reasonable amount of money on your guitar, since there's less of a chance of it getting damaged. Porch-sitters are those who are looking to take lessons and learn how to play the guitar properly. You don't want to pay the bare minimum, or else the lousy guitar will emit lousy music. We suggest spending around $300.
The Rock Star
You need a high-quality acoustic guitar. If you're looking to record an album or perform live for money, be prepared to shell out some major cash. You'll probably want to spend upwards of $1,000 on a guitar. Make sure your guitar is entirely solid-bodied and defect-free. Such a guitar should always be stored in controlled conditions (in your room or at a studio). You don't want anything to damage your precious (and expensive) baby.