I've only thrown 6 parties in my adult life. The first one was my wedding, then I did my sister-in-laws baby shower and the last 4 have been my son's birthday parties. I might eventually share my wedding party photos, and I don't have photos of the baby shower, but I wanted to really focus on kids parties because I found that you can still do fun stuff for kids and not spend a bunch of money.
What's great about kids and I think people might forget, is that they are happy with stuff that we might have forgotten about or now overlook. Kids are learning new things everyday and even though we know about all kind of things, kids don't and thus, it's easy to entertain them without spending a bunch of money.
Case in point, I worried that kids at Oliver's birthday parties would be bored that we didn't have a bounce house, clowns, puppeteer, face painting, etc... but every year since his first birthday the kids have had a blast, doing old fashion things like crafts, games, or just playing with toys they don't have at home. All kids love toys and even if they aren't that exciting anymore to your kid, they are new and exciting to your kids friends and then your kid will be loving his stuff again (if for a little while at least.)
I say take advantage of this awesome attitude that kids have and go simple and don't spend money on extra stuff like the above listed. The first birthday party my son didn't have any friends his age come so his two cousins might have been bored a bit because I didn't bring any toys, but they did have a craft that they did and they enjoyed that and the party was pretty fast paced because a one year old doesn't really have the patience to do a bunch of stuff (at least that's how my son was.) For Oliver's 2nd birthday, we were lucky because his birthday is in January so he had a bunch of brand new toys so we just brought those to the party site and added 6 cardboard boxes ($1.50 each or free if you can find big ones) and the kids had a blast, not one kid was bored and I didn't have to pay for entertainment. For his 3rd birthday I did pretty much the same thing, but kicked it up a notch with games because the kids were getting older so we did parachute games, I made bean bags for a tossing game, set up race car ramps and electric tracks (which were Christmas presents) and had a craft and they were again happy as clams. For his 4th birthday, he had the party at a park and it was drizzly and I was worried because I was hoping that the entertainment would be the kids playing on the play structure and with it raining I thought everyone would be bored. But I was wrong. I brought a 6 car race track that I got on clearance after Christmas ($20) and filled a blow-up skeleton coffin (that was supposed to hold drinks but I changed because of the rain $8) with sand and had a dinosaur and bone dig. I also brought our stomp rocket and a bucket of Oliver's Lego's and the kids had a blast, no one was bored and because it was drizzly and not full out rain, they still played on the play structure, but the hit of the party was the stomp rocket ($10, but free to us because it was a gift from 2 years ago) the bucket of Oliver's Lego's and the dinosaur/bone dig.
I guess my point is, you can have fun parties for kids and not spend a bunch of money and they still have fun. I know that this won't last so I'm taking advantage of it while I can. I also know it's easier to rent a party place and let them take care of all the arrangements, I don't think there is anything wrong with that, but for people like me, I want people to know how to throw a cool party and not worry about expenses.
I was able to save money on party favors and decorations because I was willing to make a bunch of the stuff that I needed, but I know people don't have the time or patience or creativity, but that's what the Internet is for, get ideas that way or go to Etsy, there are lots of people out there who will do it for you and for not a lot of cost. That's where I found a lot of the graphics I needed for invites and custom stickers. For Oliver's 1st birthday I paid a flat fee of $10 for a customizable sock monkey template and I used it for invites, stickers (I bought sticker paper at Wal-Mart for $4) and was able to decorate the party hats, blowers, and party favors. Take advantage of the dollar or 99 cent stores and buy the foundations of stuff there but customize them your own way. I do that with party hats, blowers, plates, napkins, cups, balloons, everything. If you can't alter how they look you can at least use them as templates to make your own thing. I bought a set of 8 party hats from the dollar store used one for the template and used the elastic from all of them for the hats I made. I needed 16 hats so I paid $2 and got the templates and elastic I needed. (I know I probably could have gotten it cheaper if I just bought elastic at the fabric store, but I had to pay $1 anyway for the hat to make a template. I know also that I probably could have gotten the template for free on the Internet, but for me it's easier to just pay the dollar and not worry about the research involved.)
I learned from doing my wedding to look outside the box of what is offered on party websites. For my wedding I wanted Chinese take-out containers for my candy bar I set up (thank you Martha Stewart for the idea) but when I looked on wedding websites (this was 10 years ago keep in mind) they wanted $10 for 5 boxes, so I thought, I just want simple boxes and I will decorate them myself, so I went to a restaurant supply store got 50 boxes for $10 bought a stamp that I liked, stamped all the boxes and added a custom ribbon with our wedding info (I can't remember the price of that, but I got a whole roll and used it on a bunch of stuff so the cost wasn't very much in the end.) and they were really cool and it cost me way less then what I found on wedding websites.
My point is, get ideas from wedding or birthday sites, but try and figure out how you can do it yourself using other resources. The candy bar idea I got from Martha Stewart Living magazine and she had beautiful glass containers that didn't have prices, but I can guess they were pretty expensive, but I was able to reproduce the look for way cheaper by looking for containers on clearance, at Ikea, or outlets so mine looked neat but didn't cost much. I also found metal scoops from a restaurant supply store for cheap and added my own ribbon and they were nice and didn't cost much and I still use them to this day. In fact the containers and scoops I used for my wedding still get used by myself and my sister-in-law for birthday parties, so I could have spent more because the investment has paid off.
I know that was a ramble of info, but hopefully I got across that you can still have nice parties and not pay a lot to do it.