She sounds ready to read, so personally, I would grab it and see if she wants to do it. We homeschool and go at an easy pace for our kids. Our barely 7 year old is in 3rd grade, mainly because of the math - he hates it, even though he's really good at it, but he finds it redundant. He's reading books at a high school level and reading comic books my husband had as a teenager. He was eager to read, so we taught him and he was full-blown reading at 4.
We actually taught my son to read Spanish first, because the sounds are always the same, unlike English. Once he could read Spanish, which took him no time, he was able to read English, by sounding them out.
PS: Our first languages are not Spanish, in fact, I only took 4 years of it in HS and my husband can ask for another beer. LOL
We JUST bought this for our 3.5 year old, who is learning the sounds of the letters. He learns differently than our other son.
We recommend: http://www.lakeshorelearning.com/seo/ca%7CsearchResults~~...
www.LakeShoreLearning.com
Letter-Sounds Matching Board
He thinks it's the best game. Our 21 month old daughter can name all of the matching items...and it watching us works with the letter sounds and trying them out.
Our friends swear by: The Letter Factory by Leap Frog - video I think.
Anyway, Anytiem my kids show an affinity for learning something, we grab it and run with it, as long as they are stil enjoying it. My son hated kindergarten and hated learning, so we pulled him out and he is doing SO well - socially AND educationally.