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Despite all the publicity about a very significant number of children who struggle with reading (which is true and not to be ignored) there is an even greater number who struggle with spelling. Some Secondary teachers would probably put it at about 60% of their pupils! Because this is a 'hidden' problem there is not so much attention paid to the problem.
I worked with children who struggled with reading and spelling at KS3 and this is the most effective way I found to help them improve. Please note, though, that, because of the element of muscle memory involved, it is quite difficult for older children to correct their spelling unless they are well motivated and prepared to practise.
I have posted this before, this is a 'Copy & Paste' job; sorry it is rather long.
Good spelling is a mix of secure phonic knowledge, enough reading experience to know if a word 'looks' wrong once it has been written and kinaesthetic (muscle) memory of the unique 'feel' that every word has when it is handwritten.
The Look, Say, cover, Write and Check (LSCWC)strategy for learning spellings that is usually taught is not at all helpful.
Firstly, it presupposes that spelling is a 'visual' skill and that pupils can visual the detail within the word (letters used and letter order). Some people are able to do this but most people can't. What is more, it is the weakest spellers who are least likely to be able to do it.
Secondly, it uses letter names and depends on the child remembering the order in which the letters are written in the word. This doesn't give the learner any useful cues at all; letter names are divorced from the sounds in the word and remembering letter order in several thousand discrete words is an impossible demand on memory.
Thirdly, it takes no account of the kinaesthetic aspect of spelling. Kinaesthetic memory is the element that ensures that you can spell familiar words without having the consciously think of the individual letters within it. It is the 'memory of the 'feel' of the word as each word has its own unique pattern which the writer reproduces as they write it.
(It is clear from your post that your grandson does understand how phonics 'works' so ignore the next bit )
Fourthly, it has no regard at all to the phonic element of spelling. That is the element which comes into play when you try to spell a word which might be familiar to you in its spoken form but you have never written. Most people find that they are thinking of the sounds within the word (maybe in chunks, rather than individual sounds) and write the letters which they know represent the sounds (or chunk).
I suggest for learning spellings:
Read the word and take especial note of the sound spelling which is likely to be tricky (like the 'au' in aunt, for example). Most of the less straightforward words only have one 'tricky' spelling in them. The rest of the sound spellings should be easy and familiar.
Cover the word, say it and break it down into its component 'sounds'.
Spell each sound in the order in which it comes in the word (writing a line for each 'sound' before you start and putting each sound spelling on its line can be helpful in ensuring that all the sounds are spelled) saying the sound as you write it. This helps to reinforce kinasthetic memory.
Check that the word sounds correct by sounding out and blending exactly what you have written (not what you think you've written).
Uncover the word and check that all the sounds have been correctly spelled.
Rewrite the word, from memory, correctly several times, each time saying the sounds as you write them, to reinforce kinasthetic memory of the 'feel' of the word.
This takes a long time to describe but it is quite easy to do.
P.S A bit of help with homophones might be useful, too. 'there', 'their', and 'they're' are easily muddled as are 'to', 'too', and 'two'. You can probably think of more.