Unfortunately, with a budget of $500, your biggest bang for the buck expenditures aren't very exciting ones. Heres a list of things that can make a big difference:
Position - get fit by your LBS
Clothing - A tight fitting tri suit will save as much time as a 404 front wheel over a baggy jersey
Aero helmet - Find one that fits to your back. If the ones you try stick up in the air, get one with a shorter tail
Tires - Bontrager Race X Lite Pro is a fast tire and it costs $60 but if you just run them in races they should last a while and you'll be much faster for it
Tubes - Lates tubes cost $10 each and also significantly reduce rolling resistance
A clean system - by this I mean. Learn to get by on as little bottles, and gear strapped to your bike as possible. All that stuff hanging in the air, and weighing down your bike does not help. For short course racing I use one bottle that is placed horizontally between my forearms. No spare kit, nothing on the frame, and nothing behind my saddle.
Theres a good saying that goes, "speed is in the details" all the things I suggested above probably add up to about half of your budget. Save the other half for a bonafide tri bike.