This is known as the “Scary Sharp” method and I first learned of it on Usenet back in the day. I’ve had pretty good luck only going up to 2000 grit automotive paper. That stuff is commonly available near the spraypaint at Wally-world. At this grit, I can easily shave the hair on my forearm. For a plate, I use a single 12×12 tile from a Big Box store.
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.
My name is Marc Spagnuolo and welcome to my channel. I am a podcaster, video producer, author, and woodworking enthusiast. I have contributed articles and video content to FineWoodworking.com, Popular Woodworking Magazine and WOOD Magazine. Producing the Wood Whisperer is a great way for me to combine four of my passions: woodworking, technology, education, and humor. I believe that even the most complicated woodworking project is just a series of steps. My goal with this channel is to show you the tools and techniques you need to perform those steps.
Finally, at the beginning you'll do just fine with a basic set of router bits that run ~$40.  A starter set will typically include straight bits for edge matching material, a selection of edge finishing bits, and some joinery bits.  As you work on a few projects you may find that more specialized bits are needed.   But specialized bits are expensive - so purchasing them as you have a specific need makes more sense than buying in anticipation of a need.
If you’ve got 220v, and want to get a seriously good TS, the Grizzly G1023RL is about the best bang for the buck in a 3hp industrial style cabinet saw…$1195/$1294 shipped. It’s not a necessity to have that much saw, but it’s close in price to many lesser saws, and is about all you’d ever need. If that’s more than you can stomach, and/or don’t have 220v, you’re limited to a TS that’ll run on a standard residential 110v outlet….again I’d look to a full size stationary saw. The typical contenders are the entry level price ranges are the Ridgid R4512, nearly identical Craftsman 21833, Steel City 35990, Porter Cable PCB270TS….all under $600. The next step up would include the Grizzly G0661, G0715P, Craftsman 22116 (by Steel City/Orion), Jet Proshop, General International, Rikon 10-201, and Powermatic offerings. These saws all have the potential to perform well…the end performance is largely dependent on how well you set them up, and what blade you choose.
Pocket holes may get a bad rap from “fine” woodworkers, but they are the most accessible and versatile form of joinery for any woodworker. You will find tons of pocket holes in the highest end custom cabinetry kitchens, so I don’t hesitate to use them when needed. They are great for quick DIY furniture projects like my pub table here. I actually own bow the low and medium budget options below because they both have their place in my shop and I can choose which to use depending on the application. If you’re not sure what size pocket hole screws you will need to start out with, here is the variety pack that I first purchased.
One of the challenges in building a cabinet for hand tools, is that as soon as you define a place for each tool in your custom cabinet, you find that you need more room to store the must have tools you just bought. I decided to make a couple of open cabinets, and employ the use of inserts that can be replaced or modified as my tool collection grows. Part of the goal was to make a clean, efficient shop, while keeping to a budget. I bought paint grade maple plywood and made the cabinets. Applying a solid maple face frame to the cabinet makes a clean looking cabinet from sheet goods purchased at $50/sheet.
You can find a project for just about every room in your home. Table scape trays make perfect platforms for dining room decoration. Wooden plaques offer a blank slate for any saying or picture you want. If you want a unique table, we’ve got a few options to consider. Headboards and benches can give your bedroom a real transformation. You can find anything you want among these DIY wood craft projects.
That's it. That's all you really need to begin woodworking. Over time you will add more tools to your collection, like chisels, drill bits, a sander and, more clamps; but for right now you should be able to get started on most beginner projects. Don't be afraid to look online for second- hand tools. Old drills and circular saws work well when given proper care. With some ingenuity you can figure out how to adapt most plans to the tools you have available. People have been making wooden items throughout human history, and they didn't need expensive planers, biscuit joiners or fancy jigs. Start learning the craft, see if you like it, and have fun.

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You’ll need a long screwdriver with a square blade that is very heavy duty. This gives you a lot of torque. You’ll also need a small and medium slot screwdriver. For working on cabinets or tight places in woodworking, you’ll need a screwdriver with a thin shank so that you can reach screws that are inside of deep holes. This is accomplished with a cabinet screwdriver. Get a couple of medium Phillips head screwdrivers, and a stubby one too, for those tight places. You may also want a ratcheting screwdriver.
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.  
After years of digging down under router tables, lifting the entire unit up to change bits, and then fighting to get the plate flush again in the table, I chose to spend the money to pur­chase a router table, fence, and lift system. I did a thorough review of these systems, and chose the Canadian made Jessem Rout-R-Lift II kit. The system comes with a solid steel stand, a phenolic table, an adjustable extruded aluminum fence, and their base model lift system. For budget reasons, I did not choose the hefty Mast-R-Lift, but I am quite happy with the lighter Rout-R-Lift II. It will last me a couple of lifetimes, so it is the right system at the right price for me in my one-man shop. Hats off to Jessem for making a great lift at a very rea­sonable price in the middle of a tough economy. The table is durable, and flat. The direct drive lift is smooth and precise. I mated the lift system to a mid-sized model 690 Porter Cable router, which has a fixed speed, and enough power to do any­thing I need. The Jessem system uses a bayonet type mount for the table inserts, a nice touch that makes swapping the table insert quick and simple. As with all my machines, the router table is connected with the supplied dust port to my shop dust collection system with automated switching. 
Sadly, that’s most of my power tools and shop accessories, but it’s a growing collection. Compared to all the money I’ve wasted on small electronics and computer junk in the past, I’d say this has been, and will continue to be, a much better investment. I just wish I had come to that realization back in college, when I was probably spending $500-$1000+ a year upgrading my computer.
If you'd like to learn more about the differences between hardwood species, I can think of no better resource than R. Bruce Hoadley's 1980 masterpiece, Understanding Wood: A Craftsman's Guide to Wood Technology. Not only does Hoadley detail nearly every species used for woodworking, he does an exceptional job at describing how to prepare, work with and finish these hardwoods. This is an industry-standard resource, one that I'd highly recommend to every woodworker.
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