You're on the right track. To get the most bang for your buck, shotguns are the way to go. $500 is way more than you need to spend. Two recent purchases of mine:
--Mossberg 500A riot gun, police surplus $150
--H&R Topper 88 single-shot $85
That's a small fraction of what I've wasted on handguns. My advice is to shop around a bit and don't be afraid to look at used shotguns. If treated properly, they get better with age. My 500A seems to be much smoother than brand new models, for example. Mossberg, Winchester or Remington are great for pump actions, but have different locations for safeties and such. I've found that no-frills Mossbergs are more intuitive for me at 3 AM, but others prefer Remingtons or Winchesters. I would shy away from the second rate new shotguns, since you can get really fine used pump actions for much less than the price of a new Chinese knock-off.
Pumps aren't the only game in town, either. I'm actually using a single-shot as my go-to gun right now. After all, against a human intruder one 12 ga shell is more than enough.