Here are some things you can say to your child when they are reading to you and are not sure what to do:
Check your picture and think about what would make sense
Try that again and think about what would make sense.
Try that again and think about what would sound right.
What could you try?
What do you know that could help you?
Do you know a word like that?
When they use the letters of the word, make sure they check all the way through by running their finger under and see if they are seeing all the letters they are saying. They cannot just check the first letter although early on that is all they can do. For example they read 'horse' and the word is 'pony'. If they notice there is no h, they are doing some good checking.
If they are really stuck, you can tell them the word but have them reread the sentence so they can hear how it sounds when they are right.
If they sort it out with one of your prompts, make sure to give them specific praise.
"I like the way you figured that out."
"I like the way you....." checked your picture, tried something and checked it all the way through.
Reading Support, Reading Recovery, ELI teacher