Welcome to the group! I'll second what (the award winning) Steve C said, and a build upon that a little further. Many people progress their build as their needs and skill levels change. Almost all of us started out in the same situation as you, with a stock rig and just looking to make a little more capable. Some us do a few mods and are happy for life, while others get bit hard by the "mod bug" and end up doing full Titan swaps and/or spending thousands of dollars in modifications to their setup. My personal journey - I purchased my Xterra 6 years ago because I needed a 4 wheel drive SUV that I could use to access remote locations for photography. I had no desire to modify it at all, but it didn't take more than a few trips off road (and a few minutes on the forums) to realize that I could make it much more capable by adding a little more ride height and larger tires, so I stepped up to 285s and ran a "poor man's lift" with just a spacer in the front and extended shackle in the rear. As I explored off-road more, I kept adding things and changing the rig to make it more capable as my skill level improved and I found myself wanting to take it more places. I added skid plates and sliders, and went through several variations of suspension upgrades (Bilsten 5100s, Radflo 2.0 coilovers, Radflo 2.5 extended travel coilovers, replacement OME HD leaf springs in the rear, etc.).
This is what people mean when they say "it depends on what you want to do with your rig." What they're really saying is, find the best balance between what you KNOW you need/want, and what is reasonable for your budget. If you're just looking to add bigger tires for the look and don't plan to do a lot of wheeling other than the occasional fire road, then a spacer lift or bilstein 5100s would be a great (and very affordable) solution. If you know right now that you want to take this thing on regular expeditions and spend a lot of time doing some pretty serious wheeling, then skip the entry-level solutions and go straight for the bigger toys (like full replacement coilovers that allow you to choose your spring rate, etc.) Just know that starting with the entry solutions doesn't mean you're locked in to them forever. This is how I and may other Xterra owners have forged our own journey.
The good news is, this also means there is often used stuff for sale as folks graduate to the next level with their rigs. We have a pretty strong community of Xterra owners here in So Cal, and if you choose to be a regular and contributing member of that community, the opportunities to get your hands on that used stuff will come your way fast and often. I will, however, throw it out there that many of us have seen folks come out of the woodworks and talk like this is something they're really going to get into. They'll buy up some used gear from a member of this community at a great price, ask for help installing it all, and then ride off into the sunset only to never be seen or heard from again. This leaves a bad taste in people's mouths, because we love helping new Xterra owners out, but not if we feel like we're being taken advantage of. So I'd suggest that you hang around and make a few friends, show up for a gathering or meet up from time to time, and get your tires dirty every now and then. Even if none of that is really your thing, I can assure you that there will be no shortage of opinions or advice from folks on this page to help you out.
