Streamers
Streamers are an inexpensive way for your kid to decorate his handlebars. He'll especially love the way the streamers blow in the wind as he is riding. Simply cut streamers to size (remember to keep them short enough that they won't get tangled in the wheels at all) and fasten them to the bike handlebars with tape. If your kid's bike has holes in the ends of the handles, you can twist the streamer ends into a point, insert it into the hole and then tape. The best part about streamers is that if they tear or get wet, you can simply replace them with new ones.
Paint or Chalk
If you don't mind the decorations to your child's bike being permanent, spray painting the bike in a color of her choice might be a good option. Remove the wheels and any nonmetal parts of the bike before attempting to spray paint it, as the paint will adhere to the metal the best. If your kid wants a different color, but you don't want anything permanent, consider letting her decorate the bike with spray chalk; it adheres to metal, but washes off easily with water. She can decorate her bike again and again in all of her favorite colors.
Stickers
Allow your kid to express his personality by letting him place stickers with his favorite characters, brands and colors on his bike. Stickers are inexpensive, and you can often buy them in large sheets at the craft store or even the Dollar Store. He'll love sticking stickers on his bike as decoration, and he can peel them off for new ones as his tastes change. Stickers can go anywhere on the bike other than the wheel, so they are a versatile option for bike decorating.