By reading books with them from the get go. By reading a book to them, with them before they go to sleep every night. By making them love their books. By giving them books as gifts and making a fuss of the book!!! By pointing out the O's and saying them in different ways together and the B's etc. By showing them their name and spelling it and Mommy's and so on. Then there are TV shows or videos like Sesame Street, or there are ABC children's songs to sing along with. Lots and lots of letters and words and fun!
Read read read to them, every chance you get. And make it fun.They will learn to want to be able to see those words themselves. Then when they seem ready, you can take an easy book and let them know that each letter of the alphabet has it's own sound and start sharing some of those sounds and then let them identify those letters - it is a progression and you just can't skip any steps as reading it too important.
I must agree with GoodLady and duffsmom, READ, READ, and READ some more. Start from when they hit this world and don't stop. It doesn't matter what you read, backs of cereal packets, labels, anything as long as you are demonstrating this skill. (I still enjoy my Mother reading news articles or extracts to me.) Children will expect to be read to as they become congnizant of the process so any time, day or night, find something to read. Even better, create books yourself and you'll enjoy the process even more. When you read these or any other book give it some OOOMPH. Change you voice for characters, and use an onomatopoeic approach i.e. if a giant is making a thud when walking, make your voice sound like a THUD. Remember, reading is fun and you want it to become a life long love of your children or grandchildren.
Once children are sitting beside you listening to the words and looking at the pictures, their curiosity will be ignited about the words. Make the reading process a time of enjoyment and not, you must sit and listen time, because the latter will turn them off as quickly as the first style will turn them onto reading. Point to the words as you read so they begin to recognise the words and learn the left to right sequence. Have them draw the characters, doesn't matter if it's a blob, but ask them what it is and write the name of the character on the drawing. Associating words with what they are doing helps them develop a vocabulary, and this in the long run assists them to develop their reading skills.
Nothing will teach your child to read better than reading to him/her! As the others have stated, you can never start too early or read too much to your child. They will love books because they see that you do! Let your child decorate their own book basket and keep it full of their old favorites as well as new books, magazines, word cards, their own created books, etc., ANYTHING with print! Set aside time each day for "Relax and Read". This is the time when everyone in the family relaxes and reads - TV is off and conversation is limited. This provides your child with a good model and establishes the great habit of Relax and Read that they will look forward to each day!
There are some great tips and advice already presented here! One additional suggestion is to borrow audio books from the library and use them in the car while you are commuting. Even toddlers will enjoy holding the book and turning the pages, and by adding the audio to the visual, you are developing skills the emergent reader needs to connect the written word with the spoken word. Pointing to the words as you read is another way to make this connection.
Check out my hub on this very subject. My approach is a little different because I hated reading to my child and had other problems. But it started with the book, "Teach your child to read in 100 easy Lessons". Reviews are available on hubpages.
You start by reading to a child when he is very young. You instill a love of reading in him by so doing. Later, you can teach him sight words and have him start reading lower level books. You can help him with this reading, and then discuss with him what he's read. As time goes on, he'll start to read on his own. From that point on, his teachers will step in and he will progress. The main thing here, is to teach him that reading is a good and enjoyable activity.
I would read to them from age appropriate material and then point out certain words so that they can learn words quickly.
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