One year i bought white paper bags and had the girls decorate them. I purcahsed rhinestones at the craft store, glitter glue, stick on letters and princess themed wands, crowns, etc. We filled them with candy from a piniata. You can make your own piniata, all it takes is cardboard and crepe paper. You can design your own. After XMAS when Walmart gets rid of their gift sets, I got makeup sets for .88 cents each which i gave to the girls as party favors.
We asked that the girls come in their favorite dress up clothes.
Target had some princess themed items for a dollar. Before XMAS i bought crayons, erasers, magnets etc. It was really cheap.
This year i bough canvas backpacks from oriental trading. I am having them decorate them with fabric paint, glitter, etc. That is their favor and a craft for them to do at the party. I may also copy princess pictures and iron them on. I am not sure yet.
I usually make my own cakes. Family fun has a great section on line with cakes. I have made the mermaid(that took along time), the castle, the treasure chest.