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What NOT to do
Please, do not use Dolch Sight Words, Fry's 100 Instant Words, or any of the other standard collections of "sight words" to be memorized. The great majority of these "sight-words" are spelled completely phonetically.
Doing this is no different than using the long discredited "whole-word" method of teaching reading. Even those that are a little trickier do have phonetic rules that they follow, or at least most of the word can be sounded out. Teaching sight words before children have a solid phonetic foundation gives them the idea that some or all words just have to be memorized. This will cause them more problems in the long run.
What you SHOULD do
Probably the best method for dealing with oddly spelled high-frequency words comes from the Jolly Phonics reading program. They call it teaching the "tricky" words. In Jolly Phonics, children are told that these have a part of the word that is tricky to spell. They are taught to spell most of the word by standard phonics techniques, and are told they only need to memorize the tricky bit. The words are also grouped so that words with the same or similar "tricky" part are taught together.
Examples of words that can be grouped together
he, she, me, we, be, the
Even "the" follows the same pattern when the word following it starts with a vowel, or if the word "the" is emphasized. Just tell the child that sometimes it is pronounced TH-EE and sometimes pronounced TH-UH, but we spell it the same either way.
give, live, have
The odd thing about these is the "e" at the end. It's there because "v" doesn't occur at the end of words in English. Just tell the child that the child that "v" doesn't ever like to be at the end of words (maybe compare it to not liking to be at the end of the line), but the "e" doesn't mind so it's there to keep the "v" company.
100 most commonly used words in the English language (notice that these are not the same as the Dolch word list)