I have been working on letter recognition as well as phonics with my 5 yr old daughter. I have come across the neatest thing. Masha Allah.
These are our bottle cap letters. All I needed to do for this simple project was save some water bottle caps! I made out simple words on cardstock and drew simple pictures or even just left it plain. Traced the bottle cap on the cardsock, then placed the letter in the circle as well as write the letter on the bottle cap. My lil Missy then matched the letters on the cards after telling me what letter she needed to find. It it actually a good learning aid for a very little price, Alhamdulilah.