Freezer paper works great for making banners. You can roll it out to the length you want and then use paint and paint brushes to quickly add your message. The back side is shiny and keeps the paint from soaking through. Whenever my kids want to paint I get this paper out. It works great for painting! You can use the shiny side to let your kids finger paint with pudding! It is messy but your kids will love it! :)
I found a game at Walmart called Splash Out. It is kind of like hot potato. You put a water balloon inside and then set the timer. When the timer goes off the balloon pops and water splashes on whoever is holding it at the time. This is a fun water game to play on a hot day. I let the kids choose a sucker or roll of smarties when they got splashed and then they had to sit out. The last player left won a candy bar.
We played the traditional balloon toss. Each team tosses a water balloon to each other. If they successfully catch it then they each take a step back and continue to toss it until there is one team left. If your water balloon pops then you are out.
I found a package of 20 rocket balloons at target for $2.50. It came with a little hand air pump. Kids always love to let go of them and watch them fly around. You can usually reuse them two or three times before they pop. They provide a lot of entertainment at a cheap price. :)
We had the kids bring squirt guns for a water fight. It was a perfect day for a water fight because it was very hot and humid.
We finished the party by going on a train ride through the woods. It was a fun day!