YOu could send cupcakes, and possibly cheap party favors, at party stores they sell things for like $1 a dozen, for his friends at daycare, as long as the teacher is OK with it. His friend will sing to him and he can pass out cupcakes and be the center of attention, that is probably all he wants for his "party"!
If you want to invite some friends over for a birthday party at home, tell him that since he is turning 4 he can invite 4 friends. There are lots of fun birthday party activites that cost nothing or next to nothing, like pin-the-tail on the donkey, or pin the whatever on the whatever, you can use any theme like pin the eye patch on the pirate, just make it yourself with paper and caryons and tape instead of pins. You can have the kids decorate their own pinata, all you need is a paper grocery bag and some crayons, markers, stickers, and whatever else you want to decorate with, have the kids decorate it, then make some small cuts or poke small holes in it to make it easier to brake, and fill it with candy, every kid loves a pinata! And of course you can do duck, duck, goose or truck, truck, car or whatever fits with your theme, button, button, who has the button, relay races, or just let the kids play with some balloons and have fun. Dollar stores or party supply stores are a good place to buy some hats and balloons and blowers, you don't really need much more than that, plain paper plates can be decorated by the kids rather than buying fancy paper plates. For the cake you can make it yourself (from a cake mix for simplicity) and it does not have to be decorated super fancy, some sprinkles and a clean scrubed tiny toy or two (like little action figures or cars) will make the cake seem amazing to your child! Good luck, and remember that your son will have a great birthday and will not notice or care about how much money you spend, it is the time that you spend celebrating with him that matters.