We don't have "parties" every year for our kids. Our reason is budget.
When my kids were that young, like yours, we did not have "parties" for them. Lots of my friends were the same way.... only until their kids were in Preschool or Elementary school, did they have birthday "parties" for their kids.
Once my daughter was in preschool... at about 3.5 years old, we did not have a "party" but just with ourselves at home, and making it special decorating the house and making her gifts hiding it around the house like a treasure hunt.
Some of the kids had parties, but they also celebrate each child's birthday IN school. And then the parents would bring in cupcakes or something for the class. Thereby, it is a celebration party, there.
To me, it is not about inviting the WHOLE entire class. It is not practical nor necessary. You could just invite the boys or the girls or your child's friend(s). It can just be 2-3 kids. Not a whole bunch of them. That is not the point. MANY parents do that.
The Teacher, when parents disperse the birthday "invitations"... ask that it be given to THEM, not the child themselves, in class because the other kids will feel left out and notice. The Teacher then "gives" the invitation to the Parent.... privately. That is what MOST Teachers do... AND "request" that parents do. It is just "rude" to have your child or you, give out the invitations to the kids yourselves, because inevitably, the kids will know and see you doing that. And if not all the kids are invited, it leaves hurt feelings.
Also, just because the other kids/parents invites the WHOLE class, it does NOT mean that you have to do the same things. That is not a precedent to follow. You do what you want to do...
At a certain age/point.... kids will LOVE to have a birthday PARTY. So, your Husband has to acknowledge that. It is part of growing up... and of creating cherished memories/traditions for the child. But, keep in mind, that once they are in Elementary school... it will become more so, and a child will then want/expect a party. So you have to deliberate that....
My daughter is now 7, and last year we did not have a "party" for her. It was just our budget. We weren't able to. We explained that to her. It was fine and she was fine about it and it was NO problem. For my son, he is only 3.5 years old, we have not yet had a "party" for him... but just as a family we celebrated in a special way. And he was happy.
It is not about a "party" all the time for every single year. Or it can be just with 2-3 friends. And then you and your Hubby.
You are not out of line... with your beliefs about it. But, your Hubby has different ideas. At your kids young ages, they will not be in angst if they do not have a "party" party. BUT, I DO believe that a child's Birthday, SHOULD be "celebrated" and it should be a SPECIAL day for them. Not just another ordinary day. A kid, deserves that special day. Party or not.
all the best,
Susan