Introduce the alphabet as early as possible. Believe it or not, signing the alphabet song to young children is the first introduction they will have to phonics. Also, watching show like "Sesame Street" will give kids phonemic awareness.
Sing rhyming songs. By singing, you are introducing young children to the sounds that letters can make.
Read rhyming books aloud. Books like the Dr. Seuss series are excellent resources to get young children accustomed to hearing sounds.
Teach the letters of the alphabet. Whether you are teaching one child or many, break down the alphabet and teach one letter at a time. You can name them "alpha friend" of the week. Make up names for each letter, such as "Reggie Rooster" for the letter "R." Make up songs that are filled with the letter of the week. Worksheets or preschool activity books are a prefect way for children to practice and reinforce the letter they have just learned.
Teach the sounds of the letters. When introducing a letter, introduce the sound the letter makes as well. For example, teach that the letter M makes an "mmmm" sound and not a "ma" sound.
Play "I Spy" with letters. When teaching phonics to young children, it is important that they are able to identify words that begin with a letter. This game can be played walking around the house, in the grocery store, when reading books or if flipping through magazines.
Play sound games. This is a way to get young children to think of what they have learned and to test their listening skills. Ask if they know any words that begin with a sound. For example, see how many words they can come up with that begin with the "B" sound. Always provide an audio example for them to hear.
Make use of flashcards. Flashcards are a great way to see what the child has learned and to further reinforce what they have learned.
Make use of modern technology if available. If you have a computer available, there are preschool and kindergarten computer games either through CD-ROMs or on the Internet that specialize in teaching phonics to young children. Also, there are DVDs as well as learning games such as Fridge Phonics by Leap Frog that make learning phonics easy and fun.
Practice, practice, practice. The only way young children will learn phonics is through practice. The more they practice, the more they will know and create a solid foundation to move on the next step, learning to read.