The first step is to never, absolutely NEVER cut a pattern. Most patterns are printed with 4-12 different sizes on one sheet. If you cut into it, you are limiting yourself to using only one size. Very impractical if you are sewing for children. Instead, trace your patterns onto tracing paper or freezer paper, and then cut them out. Yes, this process is tedious, but totally worth it in my opinion.
Next, cut out your fabric, sew up your garment, and try it on the intended recipient. Make note of any changes to the pattern you will make for next time (for example, adding length to a skirt, or bringing in the bodice).
Okay, now for the best and really frugal part. Create new and slightly different variations of the same pattern. Boring, you say? Repetitive? Well, take a look at several examples of different outfits I created from the same pattern. The Olivia Top:
Short sleeves, extra rows of shirring across chest. Dress length.
Short sleeves, three rows of shirring across neck and waist (for "bubble effect").
Long sleeves, three rows of shirring across neck and waist.
Long sleeves, extra rows of shirring across chest and back. No shirring along bottom. Tunic length.
Long sleeves, 3 rows of shirring at neck. Long shirt length.
Long sleeves, shirring at neck and high waist; long below.
Overall, I'm happy with the variety of outfits my Pink Fig pattern has enabled me to produce for my daughter. For a purchase price of approximately $12, that's $2 per outfit, plus the cost of fabric, of course. Not bad, especially when considering I'll be making the Olivia Top for years to come.