I've been brewing for 6 years. First year was partial mash, last 5 all grain.
It can be cost effective, but for me and most of my local homebrew buddies, it's a hobby, so it's not.
You can brew very cheaply (used brew pot, burner, chest freezer for fermentation control, carboys or buckets), but the vast majority of home brewers I know, they end up spending money on those things since they are hard to run across on Craig's. If you invest in nice stuff (which I do), unless you brew constantly, you'll never recoup the initial equipment investment.
Compounding things for me is that I still enjoy commercial beer, so I purchase a lot too. :)
If you still want to do it economically, here's my best advice:
- All grain
- Used equipment
- Try to get into getting bulk grain. We have a group, so I buy all my base grain in 55 lb bags. Saves a ton of money.
- bulk hops. Harder to get, but in the fall you can buy pounds of hops online from a variety of hop providers.
- Significantly lower or eliminate buying commercial beer
- Make styles that are cheaper to brew. For instance a wheat, brown or German lager (if you have temp control), will be much cheaper per batch than IPAs or imperial stouts
- Get all your info free from John Palmer's first book, Beer Advocate, or Homebrewtalk
- Take good care of your equipment. If you maintain and clean it, you can use most of it for years.