This was shared to me. It's one teacher's method of teaching her students their spelling words. Although a couple of them are a bit advanced, I think they're great ideas overall! And Fun!
However, here is the gist of it, and it's pretty cool! (Note: This is more of an end-of-the-year activity. But you can also simplify it by using only one erasable letter - ex: HAM = AM).
Take a word where the first letter/s can be erased one at a time to form a new word.
This is actually more appropriate for later in the year, but it doesn't hurt to introduce this little video gem to your students earlier. Just have them repeat each word after it appears on the screen, then DANCE when the prompt is given!
This doesn't have to be limited to just sight words. You could start out with letter names (upper and lower case). Or make it math related, identifying numbers. Make it a learning center, or a team sport. Tossing pom poms makes it damage-proof!