I keep hearing people shouting to do the
suspension. Just want to iterate that you can't do a whole lot of
suspension for $500 either. Springs are $250 + an alignment, shocks/struts are $350 for a cheap set, $600+ for a good set, FLSFCs are $250 the time you get them welded in, LCAs are $250+, etc. So for $500, you really can't do any significant
suspension mods.
Same goes for brakes. You
might could do 13" Cobra brakes on the front for $500, but unless you're racing the car on a track, I wouldn't do that mod first. My 98 has the stock brakes all around, and it'll lock all 4 up on command. No need for bigger brakes.
I'll stand by my original post. For $500, I'd do a PI head swap. If not that, I'd agree with some other poster (forgot who it was) and just completely go over the whole car. Change all the fluids, new filters, spark plugs, brake pads, rotors resurfaced, give the car a good detail in and out, etc.
That brings up a good point I hadn't thought about. I bought a Porter Cable 7424 and some detailing compounds, polishes, microfiber towels, etc. for around $250. Do some reading, learn how to use it, and you can make your car look brand new.
That was some of the best money I've ever spent for my car.