[MikeBmusic]

Some great advice already, I'll just throw in some other thoughts:

Frequency response: 3" or 4" speakers will NOT have anything below 80Hz (and maybe even higher), so you won't hear the full low E string on your acoustic (or any bass if you have it in your mixes) - you'll hear the resonant frequencies above those notes only.

Room treatment: bass traps (or superchunks) in corners and at point-of-first-reflection, ceiling cloud over your mixing position. It's quite simple really - if you have uncontrolled reflections/absorbing going on in your room, it won't matter if you have $200 monitors or $2000 monitors, you won't be hearing them accurately. For $250 you can build 6-8 4" thick traps that will help any room.

I've got 6 bass traps (2 on the front wall, behind the monitors), ceiling cloud, some small chunks in the upper corners of my small room. My budget was limited, and I had the front wall traps, so my choice was easy - JBL LSR305 monitors. They have a rear-firing bass port (many small monitors do), so the traps behind them are needed. On sale, I picked up a pair for $225 (retail is $150 each). They sound good to my ears, and have enough volume that if I crank them, they can be heard clearly in adjacent rooms.