The more time you give yourself to plan, the more likely it is that you will spot good deals on decorations, tableware and the rest.
This is a great activity that can easily be geared to different age groups. For each child, make a series of clues that leads him or her to different parts of the house in search of "treasure." If the kids are young, you can make one set of clues and do the treasure hunt as a group activity. Candy, toys and jewelry make great treasure hunt prizes and because you're only giving one prize per child, as opposed to an over-stuffed goody bag, you'll save money.
Smaller parties are more manageable for you and are often more enjoyable for your child. The general rule of thumb is to invite as many children as your child's age plus one. So, if this is a sixth birthday party, invite seven children.
Kids love to help out in the kitchen, so why not combine the food and entertainment portions of the evening? Set out bowls of toppings and let kids create their own pizzas, cupcakes, or ice cream sundaes. Another option is to give each child some dough and cookie cutters and let them go to work. You can open the presents while their creations are baking and avoid paying for costly entertainment.
If your child has been begging to do something special, like visit that rock-climbing gym or see a Broadway show, why not do it for his birthday? Make it clear that this field trip is in lieu of a party and let him pick one or two close friends to share in the experience. Even if you spend a little cash, it's still cheaper than a full-blown party.
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