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One of the most heavily used tools in your shop will be your table saw.  It is absolutely essential for ripping stock to size, working with composite material (like plywood and MDF), and venturing into the world of wood working jigs.  Budget is a limiting factor in a $500 build, but at $150 it is hard to pass up adding this Craftsman saw to your shop - even with limited funds.  
I, too, would pass on the Jawhorse, and agree with the suggestion of a solid bench. (Remember, it can double as a desk if space is limited.)  A used solid-core door can be a starting point, but there are better options, such as laminating your own from scrounged 2x4s. Spending time at flea markets looking for old tools that can be reconditioned is a good suggestion, too.
This post speaks right to the heart of frugal woodworking. The woodworker addresses how to make a dye from tea and alcohol that is fast drying and will not raise the grain of your wood. Technically I guess it is both a stain and a dye since since the tannins in the tea will actually change the color of the wood, and the other colors in the tea act more like a stain. Either way it is a great idea.
Most chisels are beveled on the 2 sides and on the cutting edge, but specialty chisels may only be beveled at the cutting edge. This bevel will be at 20 to 25 degrees down the length of the blade on one side, and flat on the backside. The blade will be between 4” and 7” long. Make sure you get chisels with a grip that fits your hand. If the grip is too small, you won’t be able to hold the chisel steady as you work. Be sure to use a mallet or wood hammer when you work, so that you don’t destroy the head on your chisel. Keep track of the edge caps, keep them sharp, and oil the metal now and then after you’ve used them, and they should be good for years. If you don’t have the edge caps, get a roll to keep them in. This will prevent them from bouncing around in your tool box drawers and getting damaged.
Thanks for the feedback. We’re glad you found the list helpful. Please note that this page contains only 10 of the 40 top tools for woodworking, displaying only hand tools. You can find the next 10 here: https://www.wagnermeters.com/top-40-woodworking-tools-2/. There are links at the bottom of each article to the next group of tools so you can view the entire list. Hope this helps.
To get the most out of your router, you are going to want a router table.  You may find yourself asking if you really need one - if you do, check this post out.​  It's one of those purchases that you won't truly understand how valuable it is until you have one.  Given the budget of $2,500, I'd suggest looking at the Bosch RA1171 ($150).  If you want to see our favorite tables along with write-ups, check them out here.
If you’re woodworking as a hobby, you already know that it can get very expensive. Saving money by not buying redundant tools is one way to keep it slightly more affordable. If you’re doing this as a business like I am, then every dollar saved is another dollar you can invest in your business. If you have other money saving tips, please feel free to share them!
Saws (I'm not a fan of Japanese saws, but you can buy good new ones pretty cheap.  ) - 1 crosscut handsaw (can be a Stanley "Sharktooth" toolbox saw from Home Depot or Lowes $15).  1 rip handsaw (used ones can be found at Antique stores for $20 or less.  Try to find one that is fairly sharp to start with).  Dovetail saw (Crown has a decent gent's saw for around $25 or get the Lee Valley Veritas Dovetail saw for around $70, Highland Woodworking carries both).  A crosscut backsaw and small miterbox is also handy to have, I can't give you a recoomendation for inexpensive ones though.
When I was just getting started with woodworking, I didn’t know anything about saws. The standard push saw was the only hand saw that I had any experience with. So naturally this was the type of saw I bought. It works fine for making cross cuts, and can even be used to rip, if you don’t have a table saw or circular saw. However, I quickly realized that I needed something for more precision cuts.
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