Phonics Pathways by Dolores G. Hiskes is an excellent reading and spelling text. Geared to the homeschooling parent, Hiskes' clear, step-by-step instructions will guide you through the teaching process. I would review Hiskes' book before I purchased an expensive phonics program.
There are many theories and ideas about the "best" way to teach reading. Experience has shown me that the methodology for teaching homeschooled children to read is quite different from that used for teaching a traditional classroom filled with 20 or 30 students. As a homeschooling parent, you have the luxury of trying different approaches and discovering the method that works best for your child. Stressing phonics is an important component, but don't lock yourself into the school model of using only one learning method. Experiment, have fun, and allow your child lots of time to learn.
For more ideas, read our article, Helping Your Homeschooler Learn to Read.