When I taught her how to knit I thought the best way to do it would be to teach her how to finger knit first - basically to teach the basics of consistency in tension and stitch size and shape - and also it is quick and not too tricky so she was quite happy to learn and then show off by telling people that it was so easy she could teach them! She loved it so much her first finished finger knitted item was the length of her bedroom! She then made many more little finger knitted items for all sorts of purposes (mainly scarfs for her vast collection of soft toys!).
Knitting is something I've never taught a child to do before so I used the hands-over-hands technique (don't know if that even is a term but I will use it here!) and basically went through the motions guiding her hands with my own. To my complete surprise, as I am a bit of a crap teacher!) she picked it up really really quickly, and I doubt me and my OH will quickly forget the night I taught her, when we heard funny noises coming from the back of the house at near midnight, only to look into her room to see her with a cheeky smile trying to knit some more of her scarf! She was just sitting quite happily knitting away, felt quite bad telling her it was really late and she did indeed need to stop knitting and do some sleeping! But I'm sure all the crafty ladies of the world will sympathise with her that she wanted to get some more crafting done!
In three weeks she had managed to do a fair bit of knitting! and had a decent sized scarf! She then, like most crafters, fell in love with a white ball of yarn and had to have it cast on! So she then had two knitting WIPs!
The white knitting didn't go as far as the purple (as she still only knows garter stitch and I think she got a bit bored) but she did do a decent size so I decided to sew it up into a mobile phone case for her.
It still makes my heart flutter when I see how perfect her little stitches are and that every one was done by her hands.
I'm sure as she grows up she will progress rapidly into lots of craft ideas, she is very entrepreneurial and I would need my fingers and toes to count the amount of times she has suggested creating her own online business/empire/etsy shop/stall/gumtree ads. The girl knows what it takes to make the cash, lets just hope she remembers who taught her how to do it in the first place! <3