I have built many of these $2 birdhouses as gifts. The basis of the $2 birdhouse is a 6" wide Dog Eared Cedar Picket, which comes in 5 and 6 foot lengths. The cheaper 5 foot picket will be enough to build one birdhouse and typically sells for less than $2. Please make sure your picket has not been stained or treated, just the natural Cedar. Also, keep in mind that any 1"x6" stock will work; I have transformed quite a bit of scrap wood into birdhouses. I have been told to avoid pallet wood as some has been treated with arsenic, but do not know this to be a fact in all cases, just be aware of the possibility.
Step 1: Materials Needed... Tools Needed...
Some good 1x6 stock, at least 5 feet per house. If using Cedar Pickets, try to find some that are not badly warped and have a uniform thickness. Remember to look for wood that you can recycle!
Indoor/Outdoor wood glue, such as Elmers, nothing fancy is needed.
1&1/4 inch brads, if you plan to use a nail gun, similar sized 16-18 gauge will work very nicely.
Perch is a 1/4 inch twig or other interesting device, such as a Golf Tee, rusty screw, basically anything a small bird would be comfortable perching on.
As basic as a miter box and saw, all the way to a chop saw and table saw if you have them.
Hammer and drill for pre-drilling holes or an air powered nailer (16-18 gauge is all you need).
Eventually, you will need a hole saw, probably 1&1/4 inch, but go to 1&3/8 inch if you have Bluebirds.
Step 2: Some Plans... (I use the term loosley)
It might help some folks to print the following two diagrams, but it isn't necessary. I do recommend using a tape measure and marking your cuts before the actual cutting begins. Also, take a look at your boards and plan around any defects.