I have a thread in Green Living about decoration ideas for my ds's 5th birthday. I'm making a Happy Birthday pennant that's been easy, and free since it's all from my fabric stash. Once I started poking around, I found lots of good party fabrics in my stash

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Balloons are cheap and festive. I think I'm going to forgo helium balloons and just blow up tons of them. They're about $1 per bag.
I usually do finger foods and soup for adults and also food for kids. This year I decided to order some pizzas and let the kids make cupcake sundaes (ds's idea.) I think it'll save lots of time and money.
He originally wanted his party at our local children's museum, but it's $150 for 1/2 in the not-too-festive party room and one hr in the museum. Way too much. I think I'll take that $150 (if it doesn't just stay in the bank) and buy some more plates, bowls, and cups. We've also given up using disposable plates, cups, flatware, etc., so I think the expense is justified. If I can only bring myself to do it...
We are doing a pinata. We haven't done one before since I don't like them (the mad rush for candy, seems to reward aggressive behavior), but ds wants one. I figure I can stitch up some goody bags and then they'll have candy to put in them.
This is probably sounding like a cheapskate party, huh? But in my experience, the kids just want to play and have cake, and all the crazy-making food and decoration prep seemed to be more for me.