We did a proper 'big' party for DD#1 when she turned 5.
DD#2 will be 5 in October - so will do another proper 'big' party.
For us (coming from NZ) 5 was the age you started school - none of this dilly dallying - you would turn 5 and start school the next day - so I guess that's where having a 'big' b/day party for a child turning 5 years old.
We also don't do a b/day party every year. We get cupcakes / watch a DVD / have a couple of little friends around - but not an all out 'party'.
I don't think DH knows how much I spent when DD#1 turned 5 - I hired a fairy - we had the party at a local park - tonnes of little girls all dressed as fairies - food and juice / water - party bags - the lot