To be very candid Olly, you are not going to get many suspension and engine upgrades done if you budget is under £500.
Bugjam's advice is good: it would be a good idea to get the motor car running properly with its standard set up. Something else to beware of is that your motor car will be an appreciating classic in its original state, it is already an historic vehicle, which will only enhance its value. If you change the engine for a 2.3 litre, add FI, turbocharge it or lower the suspension you will certainly reduce its value. We have seen one or two warmed up 244s sell for a bit less than they might have made as standard motor cars recently.
It is up to you what you do with your motor car of course, but just be aware modifications will detract from its value (although that may not be important to you).
Good fortune with your project - publish some words and pictures for us to see as you progress - we like hearing about old Volvos :-)
Alan
PS. It might be worth having a look at this bit of a thread before ypou decide what you are going to do with your project Olly:
https://www.volvoforums.org.uk/showp...&postcount=929
... it is discussion we had a few weeks ago about a similar car to yours (and mine) that had been warmed up a bit: FI, lowered suspension and some very flash (and I thought inappropriate) wheels. From memory the owner had spent £6,000 on the modifications, plus the purchase price of the motor car, but it only made about £5,400 at auction. We concluded that 244s generally top out at about £6,000, and that there isn't much point warming up a DL model - it would be more sensible to buy a GLT in the first place.