I would try to find some way to squeeze a SSD into his budget, because that's the thing that will make him go "holy crap, this thing is FAST!" Even a small, cheap one just for the OS and programs would probably impress him a lot.
Does Microcenter have any combos of this CPU with an H110, B10, or H170 board instead of a Z170? That might shave off a few bucks. The only other room for savings I see is to get a less expensive PSU (although that one is pretty sweet!). Maybe a non- or semi-modular one in the 400-450W range? The one you've picked out is fantastic, but for a budget build it's on the luxurious side.
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