The napkin dress.

As soon as I saw these cute polka dot napkins on sale at World Market last fall, I knew I wanted to make them into a dress for Skylar. I've seen pillowcase and bandana dresses for sale on Etsy, and they looked easy to make. All you need are two napkins or bandanas, some ribbon, and the ability to sew four straight lines. Actually, mine weren't even straight. Best of all, cost for supplies was $5, and you could do it for even cheaper.
As soon as it gets warm enough, we'll ditch the leggings and onsie and wear it as a sundress. When she outgrows it, it can be worn as a shirt.
I'm kind of a wing-it person, but if you like to have specific instructions, there's a great step by step tutorial here. You certainly don't have to use a pre-cut square, although it's convenient. If you have older/taller kids, just use fabric and hem the bottom. To give you an idea of how long they are, Skylar is 33 1/2 inches tall.
I'm going to try a different kind of bandana dress next, so stay tuned for part two!