Electro-Voice - RE50B

This is a different idea from what others have suggested: Use an omnidirectional mic. My favorite is the Electro Voice RE50B. It's the favorite of TV news during hurricanes or Nascar races because you can work it as close as you want without any proximity effects or "popping". That's the key. Since it's omnidirectional it is immune from "proximity effect" that makes voices boomy when too close. It also is almost immune from blasting because of its double wind screen. Finally, it is internally shock mounted which gets rid of almost all handling noise. Use an RE50B (or its less-expensive housing the 635A) and your lips can touch the windscreen and still sound fine. You get rid of outside sound because your voice is by far the loudest thing the mic can hear. Hope this helps!

Phew, depends on whole a lot of factors. For an easy-to-use and general purpose mic, I really think more people should try the Electro Voice RE50 (the 635a model was extremely similar, but is not currently available new). That's for more of an up-close spot mic that won't get overly boomy because of proximity effect and resonances coming off the guitar body. You may also be able to find a used clip-on DPA 4099 instrument mic in your budget. Remember to consider what would be comfortable for you to manage by yourself, if you're working alone. Juggling too much equipment can take your attention away from the instrument. For what I personally like to hear in a recording, my "favorite" would to be blend a spot mic (like the above), with a mid-side stereo pair of condensers. This is definitely more for a professional recording situation, but my favorites right now a Sennheiser MKH8020 / MKH8030 pair.