Wanting to film more, but not sure if I should spend the money?

I enjoy film. I enjoy writing, shooting, editing, and whipping up motion graphics. I have a friend that usually tags along in these endeavors. Recently we made a film for the Nation Film Challenge 2012, and that was fun. We've done a few projects through college and a bit after, and now we're looking to get more serious. The problem is that we're beginning to look at equipment that will run us more money than before.

Now, I have a good amount of savings. I don't want to say exactly how much, but I could buy a new car with cash and still have a little left over. Relatively speaking, it's not that much money. I need an emergency fund, which I have. I'm able to pay rent and still have some left over, so I'm OK in that regard.

I have a big project that I've been working on and I'm thinking about blowing money on a better camera and some lav mics with a Zoom H4N. It would look and sound so much better, but I've never spent money like this before. What if I don't use it enough? What if I'm too incompetent to take full advantage of my equipment? I'm scared. I want to do this. I really do, but I'm scared.

It's so much easier to sit on my money and earn interest. I'm afraid of following my heart here, really.

I had the idea to rent my equipment for my first big shoot. It would be around $400, I think. That's a lot of money, but not near $3000. Would that be a good idea? Maybe to test the waters before I go all in?

Duder the biggest truth is it is more about lighting than the power of the camera ... If you already have an HD cam then dont buy a new one and get better at photography/editing.

@Aetheldod: You're right. One thing I'm afraid of is that this film has us shooting in areas that are large and not well lit. Think of the lighting in a bowling alley (it's not a bowling alley). I guess I'd have to pick up some lighting equipment.

Save up for a RED.

I think I'm going to invest in some better audio equipment regardless, though. I'm rolling with only a Rode videomic and that's not enough for what I'm trying to do. It does its job well, but I need slightly better versatility. I can get away with not so perfect video, but I feel that sub par audio isn't tolerated as much.

Don't be afraid, just do it. If you are a good/bright guy, and failure occurs, then you will find a way to get back on your feet in no time. Best thing is that you walk away with greater knowledge and new courage. Also yes: get good lighting, or consult with a lighting expert to see how you can be efficient with your budget.

@GalacticGravy: I well remember that actual recording of audio while shooting is a more recent phenomena , most of the recordings happen in audio studios and rarely we get to hear the actual recording from film shoots also remember that you can use foley as well. So you could save some cash with the audio as well. But anyway good luck with your project man :D and remeber mirrors , white boards and black cloth are great for helping you with lighting.

Don't let anybody tell you a more expensive camera will make your films better. From my experience, sound and lighting are the equipment to put money into. With that said, all technical aspects of videomaking are worthless if the story and acting doesn't hold up. GLHF.

Do you have any of your other projects uploaded to Vimeo that we can look at?