I think that's the only nice thing I've seen you post lol.
On the original subject: $700 just isn't enough for this.
The typical step-in for 35's would be to first buy a 4.5" ish lift and run 32's or 33's (with minor trimming). The stock steering, brakes, gears, etc.. can at least handle those. Not well, and not locked if you've got a D35, but it'll roll down the road okay and look nice and Jeepy.
You then add all of the things you'll need to run 35's and get trail ready: gears, lockers, armor, brakes, steering, etc... The final step being to much more aggressively trim and then mount up your 35's.
The problem is a really complete 4.5" kit that includes the sort of things you'll want for a trail-ready jeep is going to run you 4 figures. And this is a REALLY loose definition of trail-ready since it doesn't cover armor, lockers, recovery points, etc...
This would be an example from Rough Country (one of the cheapest brands)
Keep in mind that even this fairly complete long arm kit doesn't include the Slip yoke eliminator and driveshaft, though it does at least address sway bar, brake lines, track bar, etc....
So....that brings us (within your budget) to an even gentler step-in.
1: Start at 3", running something between 31's (no trim) and 33's (aggressive trim). You'll get a lot of basics like longer brake lines, SYE, adjustable track bar here.
2: Then later you'll do a phase 2 lift which will add shackle relocation in the rear and either spacers or new coils in the front to get you more to the 4.5-5" total lift range, i.e. 35 ready from a height standpoint. You'll like do some other cost savers like adding BPE's instead of brand new shocks, relocating your 3" ready brake lines from the factory position to give more flex, etc... to get your jeep adjusted for 4.5".
3: You still have to piece together axle upgrades, steering, brakes, gears, all that crap before 35's, though.
4: You'd really want to add long arms in there somewhere as well. Control arm drop brackets are a much cheaper option, and do have the benefit of maintaining a true 4-link setup (most long arms are a radius arm setup, or a 3-llink). They tend to hang up on obstacles but if it's just a street rig or more about mud/sand/snow than rocks that wouldn't really matter.
5: okay, NOW you can mount up 35's.
It's worth noting here that if it's a street rig, steering and brakes are critical to run higher lifts and big tires safely. The XJ just isn't ready to be that tall out of the box. Ideally, something like a WJ swap would be used, netting you a better steering geometry and better brakes. That can run from ~700-800 to a couple grand on its own, depending on how you choose to source parts, whether you can weld, etc... "One ton" steering kits and such can be used as well, but don't come with the brake upgrades and only slightly improve the geometry (by moving the mounting point of the tie rod on the drag link closer to the end of the drag link). Even then you haven't account for more power or durability to the steering, like steering box bracing, pump upgrades or the use of a beefier steering box.
Step-in projects like that are more expensive and more time consuming, in total, than saving up a few grand to actually do everything for 35's all at once, but they have the benefit of breaking up the cost and work into chunks and letting you drive around a lifted jeep a lot sooner, even if it's not your final build.
Also....seriously consider just planning on 33's like vabeachmike. It's a hell of a lot less work and expense, even if his winch bumper probably cost more than your whole $700 budget.