This is how you can teach your kids how to read, not yourself. Obviously. Otherwise you wouldn't be reading this...
So, it looks like you want to teach someone to read. And it is actually pretty easy.
Here are the things you will need. It's a really short, inexpensive list:
Paper and Pencils.
Short Children's Books (Three Cups, Runny Babbit).
Children's Computer Software (optional)
Once you are ready to start, just move on to step one. I'm going to take this slowly. That's the best way to teach someone something. With lots of effort and time.
Please vote for this Instructable in the Teacher's Contest, that would be awesome!
Step 1: Sounds of Letters
I know everyone does this, but that doesn't mean you should.
A is for Apple. B is for Bee. C is for Carrot. If you start teaching this, your kids will think each letter has a specific meaning. Such as, while you are reading he will see a letter that starts with 'A' and automatically assume 'Apple', instead of memorizing the "ah" sound it makes. But, it isn't a bad idea to sing the ABC song once in a while.
Start by finding a basic word. Like Book. Start by telling them, for example, 'B' makes a 'buh' sound. Then explain how 'O' makes an 'oo' sound. And how "K" makes a 'cah' sound. Explain it further like this. Write down the word Book (you could even say each letter out loud as you write it). Then put your finger over the first letter and make them say the sound it makes. Then move to the next letter. At the end they should have said Book. This way, they are memorizing letters and the way they sound. After a while start moving on to harder sentences, like 'The cow jumped over the moon'.
Also, just because the letter Z is at the end of the alphabet doesn't mean it is any harder than the other letters. You can start explaining sentences like 'Zebra's in the Zoo' fairly early.
A good book to use for this step is Chicka Chicka Boom Boom.
Step 2: Reading Books
Now you start moving from letters to whole words. After you have practiced step one enough times, long enough to where your kids can now sing the ABC song almost flawlessly and read common words easily (like 'cow' and 'book') it is time to start reading books. I have already listed three in the last two steps of this Instructable that are good ones.
Do like you did the first day, but have your kids read out the words (like 'B' makes a 'buh' sound).
After your kids have read a few books, (It isn't bad to start by having them reading one a day) you should start reading to them, also asking questions and making the letter sounds. Maybe you could reward them with something, like candy or stickers. This is always good after school practice. Or, if you are home schooled, you can extend this out a couple more books and make this a daily lesson to complete.
It is OK to read the same books after a while, but if you read the same ones to much, they will memorize the book and not the letters / words. Which is bad.
Step 3: Writing Words
Now we get a little more advanced. After your kids can amazingly sing the ABC song, read words and books and know all the sounds, you can have them start writing them. You could buy them a notebook or binder for fairly cheap at places like The Dollar Tree or Walmart to write them in. Maybe they could even decorate them with the stickers you reward them for reading.
Each day, start by giving them common words you have been reading and have them write them down in their book. Another way of doing this is writing down the words in their book, then having them read them and write it beside the word you wrote in the book. Once again, reward them with something every one in a while if you can.
After you do all this for a while, start having your kids write story's. If they start out writing a few sentences, that's OK, as long as they are writing them.
The best way to write is buying notebook or grid paper. It is a lot easier to keep your words straight and the correct size than writing on regular printer / sheet paper.
Step 4: Completion, A+
There you go! Your kids have just started reading. This is just the basics. After a while, start buying longer harder books and making them read and write harder sentences.
Some good books to start with are Runny Babbit, Three Cups, Chicka Chicka Boom Boom and Berenstain Bears Books.
Good luck with reading!