I've been playing my Fender DG-7 for about ten years and am thinking about getting a better guitar. I have a hard time with some chords (Barre F? Forget it) and, even after having the setup checked, still feel as if the action is wrong.

So I'm wondering if stepping up to a better guitar might be in order.

With a budget of $500, what would y'all suggest I look into?

Thanks.

What's the scale length (distance between saddle and nut) on that guitar?  If it is a long scale length (typically 25.4-25.5"), that will result in more string tension than a guitar with a short scale length (usually around 24.75").  A guitar with a shorter scale length may help.  

Also, what size strings are you using?

Scale length is 25.25"

I think I'm using medium strings, but honestly can't remember. I've used lights in the past and the buzz was too much.

$500 will buy a really nice guitar used.  And right now the used market should be looking flush as people are forced to sell off luxury assets to pay bills.  A vintage made in Westerly RI Guild from the early 70s might work.  But again, shorter scale length helps.  And using your arms instead of your fingers to make barre chords also helps.

Find a large guitar store with used inventory and someone to help choose.

Can be had cheaper with coupons

A used guitar can be a great option, but I would be cautious about anything very old, unless you can really check it out closely.  Acoustic guitars (all of them...even top of the line stuff) are somewhat prone to sort of "bowing" in the middle due to 40 or 50 years of string tension. That causes the action to get high, and often, the only way to fix it is with a neck reset, which is expensive, and in many cases simply not worth the cost.

I really don't know anything about guitars in that price range (new or used) but personally, I would look for something relatively new, and as mentioned, getting your hands on it would be the best way to find out what you like.  There are full size guitars (dreadnoughts) that have short scale lengths, so you are not limited to small body guitars.

Thanks for the replies and suggestions.

Spoke to the owner of my local guitar store this afternoon. He said to come in for an hour or so when I'm ready to buy and he'll fix me up.

I'm a Martin fan, so you can't go wrong there, IMHO. But if you can get ahold of a Washburn, they make some nice acoustics, and some even have a thinner neck than a Martin...like almost Ibanez Prestige Wizard thin, which can be comfortable if you have trouble with those chords that require a long stretch.