So, your child knows all of his/her letters and the sounds they make. Now what? Now it's time to make some words!
For some words, for example said, the, is and love, you might want to try learning those as "sight words." In other words, helping them learn the word just by looking at it, rather than using rules/clues/phonics to figure it out.
Then there are those words that they can "sound out": take each letter, make the sound, blend together. That's one approach.
I like to mix it---take what they know, add some "rules" and help them take the word by chunks, rather than sound by sound.
A great use for a baking sheet and those magnetic letters (that you hopefully have organized now, right?) is making those chunks, or word families.
I usually start with the -at family/chunk. Take -at. Sound it out. Read it, read it, read it. Use your finger to scan left to right. Have them say it with you. Then talk about rhyming words. Remind them to make real words, as little ones like to make rhyming words like dat, yat, and wat. Arrange your letters like the above picture. Make each sound together with the letters on the bottom. Here's how our conversation would go:
Me: What are these two letters at the top here (pointing to -a, -t)?
Her: A and T.
Me: What sound does this make (pointing to a)?
Her: (short a sound)
Me: How about this one?
me: Good! Now let's put that together. (Scanning with my finger from left to right). Say it with me. "aaa-ttt"
Her: -at (in unison)
Me: Good. Let's do that again. (repeat) What's this letter? (Pointing to 'c')
Me: What sound does that make?
Me: Good. What happens when I put this at the front of our -at chunk? Can you blend that together?
Me: Again, a little fast this time.
Her: /k/-at. /k/ at. Cat!
Me: Great! Let's try this letter (and repeat for each letter).
Once you've done that, try mixing it up. You put a letter at the beginning, and with less help this time, let them problem solve. Remember, the idea is to recognize -at as a chunk, not as individual sounds. So it should be: c -at, not c-a-t.
Then you can have them make their own -at words, manipulating the letters themselves.
For a challenge, you can add blends to the beginning, like fl-, th-, br-, etc.
The next step could be to print/make pictures of a cat, bat, hat, mat, rat (etc) and write the word on a card, having them match the card with the words.