I can't really give a great answer to your question - I'm still learning how to deal with woodworking on a limited budget myself, but I'm getting there. It's not always easy, but when I want something I can't afford, I am starting to remind myself more and more that someday my day will come when hopefully there will be more room in the budget for my woodworking hobby. I'm also hoping to start selling the occasional item within the next year to help bring in some extra money for woodworking related expenses.
Since I long ago lost the woodcarving tools I used to own as a youth, I figured I would focus on something larger. With my current ideas of doing a commercial greenhouse venture, I have considered making my first project one of a pergola for training plants up as a living shade-tent area. I have also considered trying to do an earth-sheltered greenhouse assuming I can figure out a loophole in city ordinances and/or coax the officials to sign off on it. I would love to do some hand-carved bowls and eventually make my own workbench and maybe even craft other things like a shaving horse. A foot-powered lathe is another one that I still find fascinating from the Foxfire books.
The Japanese style saw or Japan saw, depending on who you ask, can easily replace both the push saw and the dovetail pull saw for most of your needs. This is why I included the Japanese style saw in my woodworking budget starter kit. If I was starting over, and just going to buy one saw, this would be the one. I purchased an Irwin, but there are several other brands out there. I just found this one to be the best value at the time I was shopping.
Thinking about starting a crafts or DIY business? Take a look at these creative ideas using pallets, which have become very popular. One of the reasons many enjoy creating DIY ideas into DIY projects with pallets is there are so many different type of items and decorations that can be made from this rustic wood. Pallets are simply leftover wood and using them is a very eco-friendly and green thing to do. If you choose to make these crafts to sell, you’ll be pleased to discover that many pallet crafts can be created over a weekend. So give DIY pallet projects a try, there are so many here to enjoy! Happy Building and Selling!
Turn leftover wood or old pieces of furniture into DIY reclaimed wood projects! Wood is one of my favorite materials to work with. The possibilities are endless and they give such a homey and cozy feel to any rustic home. My husband, Dave, and I sometimes even go the extra mile and carve our initials on a little spot. It’s our own way of making our DIY project even more personal! Here’s a list of some of our favorite DIY reclaimed wood projects!   

For me, I watch Craigslist, and hit auctions. My g/f scored me a huge load of pallets (free wood is good wood, especially when projects made from it generate $$$), and I work in a high end window & door company, so the scrap bin gets raided quite often. I made a deal with myself to only buy what I can pay for from what the shop makes. This includes (at times) going without a needed tool as I was waiting for a better one because I had sold what I once had for more than I paid for it. Just like flipping houses, on a much smaller scale. Right place, right time. 

The tablesaw—This tool is the backbone of nearly every shop, and for good reason. It allows unmatched precision in ripping parallel edges and crosscutting at a variety of angles. Most woodworkers find it crucial for the basic milling of stock. It is also suited to many joinery tasks, easily producing tenons, box joints, and—with a reground blade—the tails for dovetail joints.

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Woodworking is a fun hobby, but can be expensive as well. With all the power tools, hand tools, shop setups and, of course, the wood, many people are turned off to woodworking because of the impact on their wallets. That doesn’t have to be the case though. With a little pre-planning and inside knowledge, you can set up a basic wood shop and start making your own items without breaking the bank.
Let’s start with perhaps the most basic tool in every household – the claw hammer. The claw on one side of the head should be well counterbalanced by the finished head, which should be somewhat rounded. The other kind of head is the waffle-head. Most commonly used in construction, it leaves a distinctive waffle mark on the wood when you drive the nail. This, of course, is not the proper nail for woodworking.
The tablesaw—This tool is the backbone of nearly every shop, and for good reason. It allows unmatched precision in ripping parallel edges and crosscutting at a variety of angles. Most woodworkers find it crucial for the basic milling of stock. It is also suited to many joinery tasks, easily producing tenons, box joints, and—with a reground blade—the tails for dovetail joints.
Just how small?  Will you have an extra bedroom for your shop or will you be doing woodworking in your living room?  Do you have to put the projects and tools away every time you want to entertain or will you leave everything set up all the time?  A while back FWW had a video tour of a shop in Japan that was smaller than small.  I'll try to find it and get back.  Found it...  shows what can be done in a small space but this shop was not on a small budget so no help there.
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