Parents, listen to me, save your money. One year olds, two year olds, even three year olds really couldn't care less about a big birthday party. They sense your tension to provide the perfect party, cake, gifts, place, guest list. I'm really concerned about what these kids' weddings will be like when the mom spends so much time and money on a toddler's birthday!
My crass, "guy" idea is that for the first birthday you tell people to pick out the gift they would have bought, then give the child the money instead, put it aside, save it. Do the same for the second and third birthdays. By the 4th, the child may actually care about some of the aspects of the party, so spend some of the cash you've saved on a cool place or party or gift, or all of the above. There will be money left over. Continue having most of the relatives give money. Oh, 3 year olds seem to care more about the cake than the gifts or the party, so splurge on that at 3, otherwise keep it simple. By the grade school years, there will be friends from school, church, etc., so some sort of party is probably necessary, but this is not a "keep up with the joneses" deal. A simple party is plenty. Watch MTV "My Sweet 16" to see what kind of brats are being created by some parents with more money (or credit) than brains.
If you know my teachings, you know the concept of Frontier City before Six Flags and Six Flags before Disneyworld. Think of birthdays like this. You will always tend to try to top the last birthday so don't take your three year old to Disneyworld without considering you're going to have to get passports to go to Jamaica or Europe or something once you've set that precedent. And you may have more than one child, so think about "remember what you did for ....'s birthday?". There is a limit. Be kind to other parents. Maybe you should get together with your friends and discuss this subject before susie's mom has a princess party for her at the Disney on Ice performance and you're scrambling for something to top that!
Enough on this, just a final summation and admonition: Think about the long term, not just this year or this child. Think of other parents perhaps less fortunate who may well be pressured to go into debt to satisfy their little susie.
And one idea - as kids get older, try doing "giving" things for birthdays, such as organizing a yard cleanup for a little widow in your church or town, or picking up trash at a park and having pizza afterward. You'd be amazed at how memorable such a party would be, and not just to the kids and your wallet. Let your faith shine, especially to your kids. We tend, at least I do, to profess a faith that too quickly gets tossed aside when such things are facing us. Be creative