Excavating a New Area
Place a call to your local utility company to have them come out and check your desired building area for underground wiring.
Measure out your building area and mark off the four corners with pieces of scrap wood. If you're trying to build a cheap tile patio, try and keep the size under 10-feet-by-10-feet to keep costs down. Tie a string around the outside to mark off your building area.
Purchase your tiles and other materials. To save money, look at online classified sites such as Craigslist or contact local contractors and see if they have any excess tiles and other supplies they are willing to sell at a discounted rate.
Excavate your building area with your shovel 6 inches deep into the ground.
Line your four 2-by-4s along the outer border and use a hammer to pound them securely in place. This will help keep your foundation tight.
Pour a 2-inch layer of gravel and cover the entire bottom area. If you're laying a tile patio over an existing concrete slab, then you can begin to apply mortar to the concrete, one tile at a time, starting in any corner you choose.
Make your own compactor by securely tying a 12-inch-long piece of 2-by-4 wood to the end of a sledgehammer. Renting a plate compactor costs about $75 per day, so use materials around the house instead. Use the homemade compactor by slamming down the end with the 2-by-4 into the gravel to pack it down thoroughly. Do this over the entire surface until the gravel is tightly packed.
Pour a 4-inch layer of sand on top of the gravel over the entire area. Use a rake to smooth out the surface of the sand until it is level.
Place your tiles one at a time, starting at one corner, and use a rubber mallet to carefully pound them into place. Leave 1/8 inch or less of space between the tiles.
Use your homemade compactor to carefully compact each of the tiles down. You may want to find a piece of rubber or other material to put between the tile and your compactor so you don't crack the tile.
Pour sand into the joints and cracks between the tiles and use a broom to sweep the sand around until all cracks have been filled.
Laying Tile on Concrete
Clean the concrete surface with a solution of TSP and water (mix the TSP according to the directions on the bottle). Rinse off the concrete and let it dry.
Mix your mortar according to the instructions.
Spread the mortar using a trowel. Lay the mortar starting in one corner of the patio area and only lay enough for three tiles at a time so it doesn't dry too fast.
Lay your tiles on top of the mortar and set 1/4-inch tile spacers between each of the tiles. Use a rag to wipe any excess mortar off the tiles. Allow the mortar to dry for at least 12 hours.
Mix the grout with water according to the package instructions and spread the grout between the cracks of your tiles by using a grout float. Use a separate grout float to wipe the surface of the tiles once you have filled all the cracks.