Good reading for this week: Valerie's post Teach a Child to Read for $1 or Less, at Frugal Hacks.
I taught the Apprentice to read for very little money, too, when she was between three and four years old. It wasn't so much that I pushed her to learn so young, but she had been picking out alphabet letters for months already and was now demanding the rest of the reading secret. She partly taught herself; I just filled in the gaps. We used a combination of Ruth Beechick's reading booklet, a couple of library books (The Chalkboard in the Kitchen), and a yard-saled copy of Sidney Ledson's Teach Your Child to Read in 60 Days. (And we found lots of books to read together.)
(like this one) as well, because by that time it had become a family rite of passage to play "the game."
In any case, Spalding or Cheerios, Professor Phonics or Crayons' method, we agree with Valerie: learning to read (for most children) does not have to be complicated or expensive.