I am putting on a 3" lift on my 98xj it's a 3" suspension lift. If I put a 2" spacer in with the 3" coil spring, will it effect my drivetrain or transfer case? Or is it a good idea or not? Please I need to know asap thanks.!

 

yes. 5 inches of total lift will more than likely effect your drive line.

 

The jump from 3" to 5" in a '98 can require more than just the spacers & shackles when all is said & done. if you search just a little bit, you'll find more info.

 

My advice is to try. A wheelin buddy of mine commented that his xj runs fine in real life, if it was supposed to run well in theory as well then it'd cost a whole lot more.
Two aspects to consider; safety and personal tolerance levels.
Safety: don't think what you are doin has a great impact on safety, so try.
Tolerance: some people can't stand any changes in the charachteristics of a vehicle. But other are fine with noisier, slower etc.
In you mod what to look out for would be driveline vibrations. Chanses for increased vibrations increase with lift. But in the end each jeep will be a bit different.
Also check to see that rear drive axle don't ge pulled out too far from the tranny.
If try to live up to all the must have hype you better have a big pile o cash!
Also think why you want a lift. If it to fit biggerer tires, consider cutting some fenders instead. Similar result, with less impact on handling, steering etc