30 hours for $550? Not to belittle your situation, but this would have been a red flag for me. Even in Tennessee I would expect the hourly rate for a reliable developer or designer to be higher than this.

If it was a larger amount of money you should definitely tie payments to milestones. When it is such a small amount like this it's hard to spend time on a lawyer (or even your own time) for a detailed contract so, in this case, communication is key. Even when things go sour.