Get a rifle.
- Single projectile means you don't need to worry where stray buckshot goes.
- Ammo is lighter and cheaper.
- Less recoil than a 12 gauge.
On a $500 budget, the best quality rifle suitable for (un)social situations is an unissued Yugoslavian SKS. They are built like a brick (bleep)house and will keep going under the worst conditions. You should be able to pick one up for less than $200. The 7.62x39mm ammo they eat is extremely cheap, easily available in bulk, and compact. It is effective for defense or hunting game up to the size of deer. Also, the Yugo SKSes have a bayonet, which can be an extra intimidating factor in certain situations.
Ammoman has 1970s vintage Yugo 7.62x39 on stripper clips @ $95/560 rounds. That gets you 56 clips, which are reusable. He also has non-corrosive Portuguese 7.62x39 in water-tight battlepacks @ $139/1000 rounds. These prices include S&H. (I have no connection to Ammoman other than as a satisfied customer, BTW.)
Keep your ammo in .50 caliber cans. They are rugged and water-tight. You can fit about 500 rounds of 7.62x39 into a .50 caliber ammo can, IIRC.
Along with the rifle, clips, and ammo, you'll want to pick up a cleaning kit if your gun doesn't come with the issue kit. I recommend the Otis Tactical (I hate that word) kit. It uses coated cables as pull-throughs and will allow you to clean pretty much anything. The whole kit packs in a small zip-up case a few inches wide and a couple thick. It can mount on web gear or be stowed in a pack. They run about $40.
If your SKS doesn't come with a sling get or make one. You may need both hands for something but oftentimes, setting the rifle down is a bad idea.
Finally, you'll need some way to carry ammo if TSHTF. The Chinese chest pouches are cheap and comfortable, and can carry up to 200 rounds in clips. Alternately, you can carry ammo in belt pouches or USGI 5.56mm bandoleers will take two 7.62x39mm clips per pocket.
One final accessory for the SKS that I'd recommend is a Mojo rear peep sight. The stock SKS sight is an open notch and frankly, sucks. The Mojo peep sight is an aperature sight that gives you a much better sight picture. Peeps are faster on-target than open sights, too.