Involve the whole family in the process of teaching your child how to read. Have them read to the child on a regular basis. Occasionally, pile the crew into the car and head to the library. It will help reinforce the importance of reading on your child. Above all, please understand that, even though there are scads of toys available today that will read to your child, there's nothing like a live human being.
Create flashcards that contain both the word and picture. Even a child 3 years old will amaze you by being able to associate the word with the picture. Not only will this system cause your child to read quickly, it will do wonders for their cognitive skills.
Teach your child how to write because it will have a very positive impact on her reading skills. Start by teaching her the alphabet, then segue into having her write her name, a particular favorite of youngsters. Soon, she will begin to improve her writing on her own.
Introduce phonics early in the process of teaching your child to read. It's little more than sounding out the letters, or a combination of letters, but it can accelerate the reading process dramatically. Interestingly, by encouraging your child to sound out words as he reads, you will be providing him a learning tool that he can use throughout his education.
Above all, be consistent. Repetition is very much part of the process of learning how to read because it helps the child remember the sounds of both the letters and words, as well as the concepts they make.
Finally, make the process of reading fun for your child. Not only will she learn how to read, she will likely make reading a major part of her life for years to come.