We have always had friends parties, except when my kids were say 1 or 2 years old.
We do not have 2 parties- friends and relatives.
IF any relatives do stop by to my kids' friends party, they KNOW it is a friends party. Meaning, they do not expect to be the focal point nor the main entertainment focus of my kids. Nor do they get offended that it is a friends, party.
Then, we also have a budget. And my kids know that.
How old is your child???
A child at a certain age, like to have friends parties. Its normal.
But if another party is being held for family, just so they don't get offended... then well, you and Hubby need to discuss that. In some families, it is tradition... that family is at the party too. Then some family/relatives completely understand the whole friends party thing and don't get offended if they are not invited.
So how is it for your relatives/family???
Are you assuming your relatives will get offended if they are not invited? Or do you know for a fact... that they WILL get offended if they are not invited and it is a friends party???
But the thing is: a child, should NOT have to bear the burden or worry of worrying about her relatives versus her friends.