If you have the letter tiles from the game Scrabble, they will work well for this activity. The children can start by making simple 3 letter (consonant/vowel/consonant) words. They should make a list of all of the words they make. The next time they play, ask them to create some of the same words that they did previously, but this time change one of the sounds in each word to create a list of new words. They can change the sounds by substituting letters, taking away a letter, or adding a letter to their original word.