With that said, you can save some cash by making your own deterrent out of some chain, a padlock, and (optional, but very nice to have) some cloth. It will provide similar security to many cheaper bike locks and could save you 10 to 20 dollars in the process.
Step 1: Materials
A friend had some extra chain laying around - it was 5mm thick and about 3 meters long (.2 inches and 9.8 feet long). You can use chain of any thickness - the thicker it is, the more hassle it will be to cut and the less . However it will also become more and more of a hassle to carry around with you.
You can pick up chain for 1-4 dollars/foot at most hardware stores. Decide how much you need for the lock - I used about .8m (2.5 feet) for my lock.
Get a padlock (0 to 10 dollars):
I spent about 10 dollars on a Master D-1 padlock. It is pretty hefty, but don't let that fool you. It can be cut by a 10 year old with a bolt-cutter if they know what they're doing. You can get a dial-based padlock, but I chose one operated by a key for no real substantive reason.
Get some fabric (really? you must have something lying around...):
Anything will do here. Make sure you can cut it into a long strip which can be wrapped around the chain so that it doesn't pinch skin or scratch paint as it swings around.