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.
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.
While the router isn’t exactly necessary to build the most basic projects, it will really allow you to put that extra level of detail on a project so it isn’t quite so bland looking. Routers are also an extremely versatile tool that can be used in lieu of a jointer to get a straight edge on rough lumber, put a nice detail edge on a table top or piece of furniture, cut mortise and tenon joinery, cut dadoes and rabbets, mount in a table, or a countless number of other uses. Router bits can be pricey, so my advice would be to add bits as you need them for specific uses and projects. There are some variety pack kits available if you want a set to get started though. Also, there are smaller (trim) routers and full-size routers available. For the purpose of a beginner woodworking tool set, I recommend starting out with the small router and seeing just how much you can accomplish with that.
I wouldn’t give up on Craigslist or garage sales.. For around $1K or less, you can pretty easily find the four big ticket items (TS, BS, Jointer and Planer) and have the extra $2K to spend on accessories, material, DC, other goodies, etc. The key is patience and persistence, and if applied correctly, you can have a fantastic setup for very little compared to purchasing new. If you are setting up a business, you don’t usually have the time to scour for good deals, but for a personal shop, there is no pressing need other than that itch to get something done.