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how much would you spend on a 500 pt warband commander?
As little as possible.
When you are dealing with Warband the limit on the number of miniatures you can field is the biggest problem. It is always wise to try and bring along as many models as you can and this means leaving the really expensive leaders at home. Keep leaders simple but effective. They do not need piles of equipment to bolster them or the other troops. Give em a weapon and let their superior stats do the real talking.
I think you will find that the more footsoldiers you have to send at the enemy the better you will do in small games...