... but I already wrote this out for you ...
This sounds like a great project to try. I haven't done it yet, but would proceed as follows:
The CAT5 V1 cables you want to build require 16 individual 24 gauge wires in order to correspond to 12 gauge (24 gauge = 0.205 square mm, 16 x 0.205 = 3.28 square mm = 12 gauge). Since the CAT5 cable you will use contains 8 individual wires (4-pair), you need 2 cables for the positive side (+) and 2 cables for the negative (-) side for each speaker (a 4-cable bundle in total for each speaker to complete the loop).
Start by cutting 4 equal lengths of the CAT5 for each speaker (give yourself some room to play with, so say 6' for the fronts and 31' for the rears). Twist 2 of the cables together down their entire length: just roll them together comfortably, don't try and make the twist too tight (it's helpful if you attach one end to something to hold them while you work down the length of the cable). After they are twisted together, put a piece of tape (red, for the positive side) around each end, but leave at least six inches loose so you can strip back the insulation without the tape interfering. Now, with one end still secured, roll on the last 2 cables, one after the other and place a piece of tape (black, for the negative side) around each end of these 2 cables. To keep the bundle together, add an additional piece of tape around all 4 cables at each end (it's also nice to use heat shrink for this purpose). You now have a 12 gauge speaker cable properly phased at each end.
To prepare the cable ends you really don't need anything more than a sharp blade of some kind and a pair of wire cutters. The CAT5 cable should have a nylon pull cord inside, which is used to remove the outer jacket. Make about a two inch parallel cut at the end of each cable and look inside the jacket for a very thin piece of nylon string (don't worry about cutting into the wires at this point since this area of the cable will be cut off anyway). When you find the string, position it in the slit you made with the blade and continue the cut by pulling against the jacket with the string. Continue to cut the jacket with the nylon until you have about 6 inches of wire exposed, then use your cutters to snip off the jacket (try to get all the jackets to line up at each end of the bundle). Now use your cutters to evenly snip off the wire leaving you with about 4 inches of wire sticking out past the jacket (try not to unwind the wire pairs if you can help it).
To expose the copper, all you need to do is make the slightest nick in the insulation about an inch or so from the end of the wire, then pull the insulation off using your thumb nail (place the wire between your thumb and index finger and put your thumb nail where you made the nick, then pull). It is possible to use wire strippers of course, but if not done correctly you will damage the wire due to its small size. The insulation on this wire is quite thin and pulls off very easily ... and you said you wanted the cheapest solution. When you get good at this, you can strip off the insulation on a pair of wires without un-twisting them. After exposing the copper, twist the positive (red) group together and then the negative (black) group. Try to keep the twist nice and tight, but not too tight because you have to lay on a lot (16) of wires. Once you've done this, cut off the ends to flush them up and so you have just the right amount of exposed wire to go into your bananas (I recommend soldering the wire into bananas made for this purpose).
You can clean the whole mess up with colored tape or colored heat shrink, etc. You can also purchase a pair of pants for each end, which really makes a nice job.
Have fun.
