We just did a 70's theme for a work function(were going to do just "Disco" but thought 70's would be a better theme since it includes the hippies too!), this is what I did:
-Oriental Trading.com - Bought LOTS of Disco balls the necklace kind and some larger disco balls to hang all over the ceiling / wear. LOTS! If you think you got enough,.. buy a couple more! Them send the children home with one as a party gift they will love it! The parents will probably want one too!
-GAMES-Oriental trading also has a spin disco moves dance game (might be too advanced for a two year old though!) We also bought retro games to play on the side- Rubik's Cube, Connect Four, Twister,.. Set them up for independent play and also added that fun retro flare. Mini slinkys and UNO card games would make GREAT gift bag stuffers (check oriental trading/local party store)
-Check out the local party supply place to get some in the door streamers as well as anything metallic (doesn't have to be disco themed sometimes just getting metallic colors works, can be used for other party themes and less expensive.)
-Check out the local thrift shops, pick up some seventies records and tape/tack them up on your walls and place them around tables,..etc (the records/the record holder) this and the disco balls are key for making it super cool! The best part is you can probably get 2-4 for a dollar and it doesn't matter what shape they are in cause your not buying them to listen to! If you get a black light/disco ball the kids would LOVE IT! Check out spensers for inexpensive ones..
-Lots of disco music! 2-3 cd's would be perfect! That way you wont be listening to the same songs over and over!
-Food idea - we bought a bunch of retro snack food/candy may want to limit this since you dont want to fill them up with sugar or pick a couple for gift bags (will help fill them up for less but also will be super cute!)- Just give you a run through since I did my homework on this you wont have to: Anything Hostess: Twinkies, Ho-ho's, etc.. Cheese-its, FONDUE!!! WAS A HUGE HIT! (We had Cheese & chocolate), Nabisco snacks: Nilla Waffers, Glass Bottled Coca-cola(QFC had glass six packs super cute! Made GREAT edible decoration!), Cheese Wiz/Easy cheese and crackers. DEFINITELY DO THIS: MAKE a big batch of Rice Crispy Treats!
Candy- BIG RedVines container (these are good and not terribly bad for kids!), Otterpops, Bazooka bubble gum, tootsie pops, big league chew, pixie stix, PEZ, anything retro...
Another thought if you expand it to 1970's you can include hippy beads and stuff,.. if you know a family member or teenager who's relatively good at art you could even get some inexpensive face paints and have a face painting table! Make it simple and just have a few designs that go with the theme: Rainbows, Peace signs & Hearts. That would be so fun!
Hope this gives you some good cheap ideas!
This website gave me great ideas!
http://www.inthe70s.com/leisure.shtml
Have fun! Make it low key! Going this route for our work function was especially great because it was cost effective and everyone LOVED how it brought back memories. It was SO easy! The 70's had GREAT snack food!
Another great idea depending on how into this you want to get if you do a general 70's theme and depending on the age range of the kids is to make tiedye shirts,.. I did it in elementary school and thought it was the coolest! If they're young you can do them yourself and then leave them in the rubber bands (once they're dried) and the kids can unband them and open them up to see the surprise of what their shirts look like.