Years ago, there was a blog post about simple handmade books for kids. I love the idea of keeping lots and lots of simple, stapled books for kids to fill. I think it's fun to make more fancy books too (I occasionally do these too), but the "fun" of binding and folding wears thin after a while. Mostly I think kids just want a space to get their thoughts and drawings down. I had to go get a long-arm stapler because we do so many of those stapled books.
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As for content... well, really, that would depend on your kid. In my house, books could be about chickens, dragons, Star Wars, planets, Halloween, space battles, etc. I envision eventually writing books about our field trips, nature observations, travel journals, animal life cycle, science journals, etc. I also thought it would be perfect to make a little handmade album with pictures of the kids and captions written by the kids. Just go with your kid's lead. :-)