Listening to my Mom talk to her friends when my siblings were small, and when her friends had small children, I heard that small children grow very very quickly. So quickly that it is hard for parents to buy bigger clothes for them fast enough. Today I had an idea.
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Suppose you made a shirt for your little one out of one type of fabric. Then your little one got longer, so the shirt is too short. You could cut the shirt horizontally and sew in stripes of a new fabric to make the shirt longer. Likewise if your little one got rounder so the shirt is too tight you could cut it vertically and sew in stripes of new fabric. If you end up doing both to grow the shirt longer and wider you also end up with a cute squares and stripes patchwork look for your little one.
This could work with pants too I think...though I am unsure about expanding space for the little one's bum.
This could definitely work for a dress. Make a simple strait tubelike dress for your really little one. When the dress needs to be longer just add a ruffel to the bottom. As the dress needs to be wider cut horizontally to just above the waistband and sew in triangles, to make the waist wide enough and flair out the bottom of the skirt to make it fuller as your little one gets bigger.
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