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.
The Jay's Customs Creations YouTube channel releases weekly videos on shop projects and dimensional lumber projects. Jay's show can really help you if you want to do DIY woodworking projects on a budget. He sometimes shows viewers how to complete the project without electricity and using only hand tools. He goes over the prices he paid for materials to give people a realistic budget for the project before they get started.
Some moisture meters have pins that penetrate the surface of the wood. This can leave tiny holes that mar the surface and require filling. Others are pin-less. They have sensing plates that scan the wood beneath. However, not all pinless moisture meters are the same – look for one that uses technology that is not affected by the surface moisture in the wood, such as Wagner Meters IntelliSense™ Technology Moisture Meters.
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.
These are without a doubt the most adorable things ever. The fact that you make them with coffee filters and they are cheap does not cloud my judgment, either. They are really easy to make though and so creative. These coffee filter pom poms would look so adorable hanging in a little girl’s bedroom or just anywhere that you want a bit of decoration. You can use them to decorate the deck for summer parties or make really large Christmas ornaments from them. Either way, you just need disposable coffee filters, some hot glue, sturdy cardboard and string and you can find the tutorial over at Bored & Crafty.
Mitre Block/Box for Cutting Coving Skirting Boards Polypropylene mitre box for accurate cutting of mitres and butt joints. Colours may vary from image shown. Stock No: 633731 EAN: 5055058172877 External Size: LxWxD = 300x140x75mm Internal Size : LxWxD = 300x105x58mm Colour: May Vary: Image is for illustration purposes only. Manufacturer: Silverline.
On the money issue one`thing I did is find something that is fairly easy to make and easy to sell. I made kaleidoscopes to begin with and still whip up a batch if I need to buy wood or a new tool. A neighbor WW makes wooden condiment holders for restaurants. A good friends son worked his way thru college by making a certain bearing that they needed on his tiny lathe. Spend a month or so on $$$ stuff before doing the better stuff. 

Through my cabinet-shop connections, I managed a snappy deal ($200) on a used cabinet saw with a 54-in. commercial rip fence. That price would be hard to match, but it is possible to find a hybrid or used cabinet saw with a high-quality fence for $600 to $1,200. Some of them will run on 120v household current, meaning you won’t have to rewire your shop for 240v service, but be sure to check for compatibility before you buy. 

Tung oil is derived from the nuts of trees that are native to Asia but have been cultivated in other parts of the world. This is a durable finish that has a rather quick drying time and is very moisture resistant. Tung oil penetrates the woods surface, soaking deep into the wood grain for a fine finish. Tung oil is great for exterior furniture, tabletops and countertops.
Alex Harris is a teenage woodworker who posts how-to videos on woodworking projects. On his channel, Alex makes the things that might be of particular interest to younger woodworkers, such as Frisbees and bottle openers and even a wood backed case for your iPhone. Alex also has a corresponding woodworking vlog where he answers questions from viewers.
A long-established channel with Italian-American woodworking geek Marc Spagnoli and his sidekick Nicole.   It's filled with great tutorials, guides, reviews and generally high quality content.  I'd described as aimed at an improving, and committed, woodworker - he uses fairly lots of clamps and glue, and shows in professional how to build quality pieces, generally of furniture.  I learned a huge amount from here, and it's easy bedtime viewing.  
Non-Standard Miter Slots - This one is a downer.  One of the primary advantages of having a table saw is access to jigs that expand the saws functionality.  This is a major issue if you plan on buying after market jigs.  Given that we are limiting the cost of this buildout to $500, I am guessing that after market jigs are probably low on the priority list.  Your going to want jigs once you start researching what they enable you to do, my advice is to build your own - there are plenty of plans online.  
You’ll find here, quite a comprehensive list of YouTube woodworking channels, and I must thank the woodworkers of reddit for helping me put this list together. I did originally decide decide that a channel needed to have a minimum of 1000 subscribers to be included on the list but after a lot of feedback I decided to include every channel that was sent to me (as long as it was woodworking themed). There were a couple of channels (Clickspring and Inspire to Make) that were on the list that I have removed because they weren’t strictly woodworking, but still do think that they are definitely worth checking out.
Ok, the leap from $1,000 to $2,500 is a big one.  I certainly didn't make it at one time.  It took me years.  But I know folks that decided they wanted to get into woodworking and dropped at least $2,500 getting themselves outfitted.  When you do make the jump, the thought process becomes much less about making sure you can get the job done and becomes more about having quality tools to get the job done.
The problems  that we least expect.  Five years ago i purchased a bicycle and discovered while riding that I had developed balance problems.  I ignored the problem and stopped riding the bicycle.During this period I built a workshop in my basement and stocked with the best handtools.  My lifelong dream was to be an anarchist!  In February 2012 I started having episodes of more severe balance problems which resulted in hospitalization and extended nursing home rehabilitationl for six months. The diagnoses is Parkinson Disease which causes muscles to react to unwanted brain signals.  Needless to say the therapist ordered "no woodworking" period" because of the hazards associated with machines and sharp tools.  I presented my case that I did only handwork with hand tools.  The therapist answer was "NO!".  Now I'm confined to using a walker or wheel chair and reading how you all are enjoying the smell of sawdust.
All in all, for whatever reason it is that you enjoy woodworking, then you always need to follow that passion.  There is always going to be obstacles to overcome, whether that be not enough money to buy your tools, or space to put those tools, or time to enjoy woodworking.  That is something that every person has to overcome.  Everybody has there own unique obstacles.
I use a 9″ x 12″ Chinese grade B surface plate and wet the back of the carborundum “sandpaper” to hold it in place. Obviously not the “budget” version, but I have the surface plate for other purposes. At about $17 from ENCO it wasn’t very expensive. And it *really* is flat to better than 0.001″. So the thickness of the paper is the biggest error. I also have a good assortment of Arkansas and other types of stones, though none of the Japanese waterstones. I generally don’t use the surface plate unless the edge is really bad e.g. an abused tool picked up at a yard sale.

The type of wood you choose will determine the overall strength, look and cost of the finished piece. Many varieties of wood exist, and CZ Woodworking will work with each customer to determine what wood will fit your needs best. Each wood has its benefits and can be utilized in a number of different ways to create various looks within a project. Explore the various samples below to determine what might work best for you.
This style of saw will provide more power than a contractor-type saw and have the high-quality rip fence you need to do good work. However, because they are favored by professionals and serious amateurs, cabinet saws are harder to find on the used market. Scour the classifieds and online sales (be sure to check industrial auction sites as well), and do some networking. Check the bulletin board at your hardwood supplier and ask the proprietors if they know of anyone selling a saw. Also call local cabinet shops. They sometimes have a surplus tool sitting idle that they’d be willing to sell. Take your time in this step. A careful investment will pay dividends in the long run, but a well-intentioned compromise can cause long-term frustration.
If you have wood pallets just lying around the yard, put them to use by turning them into a great mud room bench. This bench would look fabulous on the deck or just inside the door, wherever you want to put it. When you finish putting it all together, just sand and stain it whatever color you want and you have a beautiful bench that cost you very little to create.
How about a hunk of butcher block counter top on a 4X4 (legs) base on locking wheels.  Round over the good side and it is a rolling kitchen stand - chopping block -  island.  Flip the top over, lock the wheels, and it's a bench.  There is a vise that is sold by Woodcraft that drops onto a mounted post in both vert and horiz positions that would be perfect for a small flip top bench.  The post would be mounted to the underside, unseen till the top was flipped and the vise dropped on.  It pivots but when the jaws are clamped it is tight.
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.
"Woodworker's Supply, Inc. failed to properly investigate these complaints and failed to protect Ms. [Teresa] Logsdon from illegal sexual harassment, and gender discrimination in the workplace," according to the complaint filed by her attorney Wendy Owens of Casper in July. "Ultimately, Ms. Logsdon had no choice but to give notice of resignation to protect herself."
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