I kind of do spelling and phonics together.  It is not formal instruction in any way, yet. 

Spelling:

If I come across any misspelled words in her writings(during school time or on her own) I'll make a note of the word and 2-3 times a week we'll have spelling drill on that/those words.  She'll write each word 10 times and then the next day I'll test her on it.

Phonics:

I'm following the phonics lessons in a book  got from the Teacher's store entitled Making the Grade: Everything Your 1st Grader Needs to Know.

Right now we are reviewing short/long vowel sounds.  Since she can read very well we are not doing extensive drill work...just review.