I'm in the same boat you are, brother. My budget is slim to none. I have to scrimp and save to get anything. With that, here are a few things I did:
-Hit up your local pawnshops for tools. Go for mostly hand tools though, they can be proud of their power tools at times. I picked up a bunch of good files and hammers from mine.
-Find a Harbor Freight tool store in your area, they are my new favorite place to hangout. Just be sure to research your purchases first, not everything they sell is worth the money. Their 1x30 belt w/ 5" disc sander/grinder works great as a starter. I got mine for 50 bucks when it was on sale and I had a 20% off coupon.
-Talk to anybody you can about any supplies or tools they may have access to. My FIL works at a stagecraft facility and has access to just about anything I might need, except quality steel. My dad had a bench-top drill press and wood-cutting band/scroll saw still in the original boxes. He said if I put them together they were mine to use.
-Get some
soft firebricks and build yourself a small forge. I picked up mine here:
K23 Insulating Fire Bricks For Sale They are a bit irregularly shaped (trapezoidal) but they work just fine and are a good price.
-Scrounge supplies, especially handle materials, from wherever you can. My first handle was a scrap piece of Aspen that I found in my dad's shed. I'm currently looking at picking up a pallet for the oak slats.
-Lastly, and most importantly, listen to all the advice from these guys. They know what they are talking about.