Tough question. Depends on the ages/needs of your kids. Are we talking Netflix rentals? Amusement park visits? Broadway shows? Cable payments? I know we're cutting back on spending so our entertainment budget has gone way down. Besides there's so many inexpensive ways to keep kids entertained. Here's a few things we do to cut entertainment costs:

-Order DVDs online from the library
-Attend free outdoor concerts
-DVR (worth every penny)
-Visit city/state parks
-Go on long walks together
-Pack a picnic

I find with my kids keeping it simple impresses them much more than spending $$.

Depends on your needs and WANTS.....most people consider wants first, when in actuality your necessities should come first. Sure you can still have a good time with the kids...you just have to find ways to teach them the importance of money. Not buying any and every thing they want.
I found a great site with tips on that sort of thing
http://www.consumerfinancetips.com

First budget the necessities such as food, clothing, housing, savings, charity, etc. Then see how much you have left for luxuries like entertainment. Entertainment is a category that is easier and more practical to cut than others. Depending upon where you live, there are usually lots of free or inexpensive ways to entertain your family. Where I live there are free concerts in the park, free outdoor Shakespeare plays, and a movie theater that plays free family-friendly movies during the week. Depending on the age of your kids, you can also take your kids to a park, for a bike ride, to play tennis on public courts, etc. If your kids are old enough, you can give them a modest allowance for doing chores and helping around the house. Then if they really want to buy something that you don't want to spend your money on, they have a choice of using their own money or not.

Define entertainment. Some aspects of it overlap with other domains.

Pay yourself first: Make sure that you are meeting savings goals before spending on entertainment.

There are som many inexpensive or free things that are overlooked. You would be surprised to find that many kids just want to know that they matter. You can do this by choosing to toss the ball out back or choosing to go on a bike ride togehter. I always thought family game night was a good idea - no tv, no computer - just quality time together.

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