I bought these tiny bird houses at Michael's Craft Store for $1 each, so aside from that and paint and glue costs, these are a cheap and fun craft activity for kids.
I had them go out into the yard and find things in nature that they could decorate with. They came back with mini and large pinecones, pebbles, sticks, acorns, and tree bark.
Here are the finished houses:
Note- These are not intended for use by real birds. They are just the teeny houses meant for decoration. Michael's does sell larger houses that can be used for your feather friends though.