But wait! There's MORE
Many acoustic guitar pickups are piezo and those bring their own set of issues, such as; very low output and very thin or crappy sound. Knowing the exact pickup might help this discussion. The fact that you are on a tight budget means that you may be trying make do with stuff that simply won't deliver what you want. It might be worth investing in a direct box that is designed specifically for piezo-equipped guitars, but a decent microphone is almost always going to deliver a much better sound.
Yes, there is a lot to learn with digital recording, so be patient and keep at it. You don't NEED Pro Tools as most of the available programs are very capable(especially if all you want to do is make your own music).