that's gonna be real tight with $500 unfortunately, i keep a small tank also {29 gallon} and i had a budget for it that was similar to yours... for lights i use the light fixture the tank came with the tank with a 10k bulb, and two clipon 60 watt lights with 6500k ge "pigtail" {the ones that say 15 watts equals 100} that type of setup will save you alot of money and can be quite interesting/fun, obviously though this setup wouldn't allow you to keep alot of more light dependant things,{although with feeding i've managed to keep an atlantic anemone growing and happy for 6 months now under this lighting setup}. theres a lot of really cool lower light level coral to choose from to..about 20 pounds of play sand from home depot,a small air pump,airline,airstones{i use a bubble wand for an airstone in this tank as the wooden ones make bubbles that are to small and messy} that stuff should come in under $100, you'll need salt of course, i would also grab a hydrometer and a nitrate test, a heater is necessary,and thermometer,light timer pushing $175 now,i would skip the skimmer entirely for this tank and spend another $200 on liverock...if you're a patient person get base rock,if not get the best looking liverock you can find,then i'd go to the grocery store and buy 20 gallons of poland spring water,,when i got home i'd throw all this in the tank, get it setup how i like it and then,, throw a chunk of hamburger in there! lol i'm serious!,,, now remember the nitrate test kit, wait a week or 2 and test for nitrate,if you don't have any, wait another week,if you have any congrats, you still have
125 to buy your first fish and or coral with.. it's extremely important not to add alot at once fishwise in a setup like this, in my case i spent $100 on mushroom polyps,and 1 fish.
this type of setup isn't for everyone and isn't gaurranteed for success, but with research,patience,and a little luck you can have a real cool looking tank on a tight budget,just beware though, i went out 2 months after setting this tank up and spent way more than i had on a 120 gallon system, this stuff is extremely addicting! lol
btw the 29 is still thriving 8 months down the road{still quite young really},suffered a few fish losses and other dissapointments,{steep learning curve}but alot of succes as well, i hope this helps rather than confuse, theres alot of ways to approach your first tank and sifting through all the different opinions can be rough, you came to the right place though, the folks here are quite nice and helpful | 
