Spend at least five to ten minutes a day teaching the child the letter names. Start with vowels, then move on to consonants. Because they are so interested in their names, start with teaching them those letters, then continue until they can look at a letter flashcard and say the name without hesitation. Once they can run through the complete alphabet, upper and lower case, they are ready to move on.
Recognize letter sounds as the next step in teaching phonics. This can also be started as they learn the letter names, but don't overwhelm a child with too much to remember. Learn the vowel sounds first, since most vowels have two or more sounds.
Purchase or make your own sound flashcards. There are also letter sound songs that children love to sing and which speeds up the learning process. To test a child, use the sound flashcards. Also point to words as you read together, such as apple, or bat, and ask them what the sound of the first letter is.
Begin to teach sound combinations, such as "at" "to" and then later, "ilk" and "ink." Sounding letters is an important step in reading complete words. Start with the simplest words before moving up to four and five letter words. Children will begin working on rhyming sounds and alliterations, such as, "cat" and "hat" or "cat" and "cot."
Implement letter and sound combination worksheets to show how well the child is understanding. Point to words as you read together and help them in sounding out letters and recognizing sound combinations until they are able to see a word and read it with little difficulty. This takes time. Be patient and consistent.
Identify first and last letter sounds in a word, slowly incorporating into learning letter and sound combinations. Start with recognizing beginning letter sounds, followed by recognizing ending letter and sound. One way to test them is to show pictures of things that start with the same letter, then add one that starts with a different letter. If they can pick out the odd sounding word, they are understanding this concept.
Teach the child to put separate letter sounds together when forming words. Using plastic letters, or letter cards, point to the first letter and ask them to sound it out. Such as b - a - t. Each time they repeat the sounds, move the point quicker and quicker until they are actually saying the word.
Show children how to sound out words by remembering the sound combination, such as b - at. As they sound /b/ and /at/ repeatedly, they will soon sound the word as a whole and understand how to break down letter sounds to read a word. Once words are read with ease, teach the child that a string of words put together in a cohesive way makes a sentence. Soon they will be on their way to reading independently.