Whether you want to make finger puppets for the story of the "Three Little Pigs" or a sock puppet version of "Little Red Riding Hood," kids will go crazy and remember the story. Useful materials for puppet-making include yarn, old socks, googly eyes, markers, paper bags and felt. For older kids, challenge the children to then re-enact the fairy tale using their puppets and a puppet stage they create.
Encourage kids to use ordinary household items to make something really great. Toilet paper characters do just that. Create the characters from scratch by gluing construction paper or felt to the rolls, or print off coloring page images and cut them out. For an added effect, ask the kids to hold up their new characters whenever that character appears in the fairy tale.
When you are teaching a tale about princes and princesses, give the kids an excuse to dress up. Pre-cut crowns out of cardstock and let the kids decorate them with glitter and beads. Give the children some cardboard and allow them to make their own knight-worthy armor and swords.
Test your kids' memory and comprehension of a story by instead asking them to create a book of their own. Younger children can retell the original fairy tale, whereas older children can create their own take on a classic fairy tale. This concept is especially useful when you are teaching kids about stories such as "The Stinky Cheese Man" and "The True Story of the Three Little Pigs."