A year to the day after “Once” premiered at Ireland’s Galway Film Fleadh, writer-director John Carney was trying to explain how he pulled it off.

How did he turn E130,000 (approximately $160,000 at the time) into a film that has earned more than $5 million in U.S. release? How did he parlay an average filmmaker’s tip money into a contender for Oscar recognition and what looks to be an Independent Film Awards player in several categories?

The short answer: Economy-class filmmaking was familiar territory.

“In a way, it appears like a first-time film,” Carney said while making a roadside dinner stop on the way back to Galway to attend this year’s fest, “but actually I had done stuff before, so I knew the ropes. I knew what mistakes could happen. If I had a crane one day, I knew I could get three or four shots out of that.

“I kind of learned how to work on a small budget and how to get performances out of non-actors, so I guess I knew ‘Once’ wasn’t a million miles off what I had done before.”

When Carney began conceiving “Once,” a story about a street musician inspired by a gifted Czech immigrant to seek greater things, he and songwriter/lead actor Glen Hansard recognized they could apply for E100,000 in funding from the Irish Film Board. But except for a brief period in which actor Cillian Murphy (“Batman Begins”) looked like he might take on the lead role — which might have meant financing upwards of E3 million — they couldn’t count on much more.

For both aesthetic and pragmatic reasons, they embraced their impending filmmaking poverty.

“Very early on in this process, Glen and I said to each other, ‘Let’s keep the budget fairly low on this film,” said Carney, who played bass guitar in Hansard’s band, the Frames, from 1991-93 before turning to filmmaking.

To help round out the budget for his 17-day shoot, Carney threw in some scraps from his own bank account while also deferring his own pay, allocating it to Hansard and co-star Marketa Irglova (in her first acting role), with the promise of back-end rewards for all if the film performed well.

No money went up front for the songs written by Hansard and Irglova that have been integral to the film’s success. Filming took place on the street and at friends’ houses using natural light. Most importantly, low-budget didn’t mean low-experience.

“Everybody was putting all they’ve learned over the years into those 17 days,” said Carney, who completed his first film more than a decade ago before co-creating the successful Irish TV series “Bachelors Walk.”

Ultimately, Carney believes that the tight funding became an asset to the film.

“I think I would have just tried to make it look the way it does look (even with a higher budget),” he said. “I think basically what I would have learned very quickly is I want this film to look like (we) made it for nothing.

“You see that all the time. The guy has money but he’s shaking the camera to make it look like he doesn’t. Actually, the reason the camera is shaking (in ‘Once’) was because we couldn’t afford tripods.”

The widely appreciated quality of the film took over from there. A Sundance Film Festival scout saw “Once” at Galway and pushed for it to come to Utah for the January 2007 fest, where it won the world cinema audience award. Summit Entertainment locked up worldwide distribution rights (excluding Ireland), then sold the North American portion to Fox Searchlight, reportedly for less than $1 million. (Fox Searchlight will boost promotion of the film to press in Los Angeles up an octave at the end of this month, bringing Hansard and Irglova to perform following an evening screening.)

The film’s relative runaway success all but ensured that Carney would have more money to work with on his next project (announced earlier this week as “Town House,” a Fox 2000 studio pic set to begin production in January). And though he laughed at first about the prospect of being flush with cash — “I think that I can handle that” — his innate prudence kicked in.

“At the end of the day,” he said, “even if I do have money, I am going to have to be careful with how I spend it.”