It can be difficult to know when to prompt a young reader to look at a word and fix-up their mistake. Quite honestly, it can depend on their personality and the current focus of reading instruction. But I will try to give you some general guidelines here to help you know when to step in. It is important to help students become more aware of the types of errors they are making so it will begin to support self-correction. Our ultimate goal is that they begin to think about whether something makes sense and are able to begin to fix-up mistakes on their own. But if we are militant, and insist that they read every single word perfectly, it could demotivate some learners. Conversely, if we always jump in and tell them any difficult word, they are not learning self-monitoring, which can impact their overall reading level and comprehension skills. We need to find a balance between the two.
Some readers will just want to be finished with their reading or haven’t begun thinking about whether what they have said makes sense. I would still let them finish an incorrect sentence and then ask them if it makes sense. Then you can go back and look at it together. A great way to help these students become more aware of errors, is for an adult to read a book they just finished, and make similar errors to those the student made. They love to find our mistakes and in the process you have helped to make them more aware of their errors. It is amazing to see these students begin self-correcting their mistakes after a few weeks of this type of support.
You always want to prompt a student to look at a word again if the mistake interferes with meaning. If they say something like cool instead of school, that could make them miss an important event or setting from the story. So you will definitely want to prompt them to look at that word again.
If they make a mistake with one of the vocabulary words that are focused in the story, then you want to help them make sure they get that correct. If it is an error in pronunciation, then you can remind them what the word says, until they are able to remember it on their own. Say it in a silly voice and remind them that some words are harder than others so they remain confident. You can slowly remind them of what the word means or just give them the sound of the tricky syllable or sound they are having difficulty remembering. Eventually, they will be able to recall the word on their own.
There is typically a focus for instruction on particular word patterns that you will want to make sure they are getting those correct. If you are working on word families, vowel patterns such as silent e, ed endings, then you will want to hold them accountable for the focus of their current decoding focus for instruction. Instead of telling them the word outright, remind them of the rule. For instance, if they struggle with the world found, remind them of the sound the ou makes in that word. Then they will be empowered to figure it out on their own.
You also want to hold them accountable for sight words at their instructional level, that they have begun practicing. You may need to give them a meaning hint if the word is a rule breaker or give them a hint about which part of the word sounds differently than it should. We want them to be able to read sight words in isolation and in texts so it is important to encourage both.
If you are reading with someone that speaks more than one language or has speech and language delays, and they make a grammatical error when reading to you, then you will want to work on that with them. At the early stages, you may want to repeat their mistake and then give them the correct sentence to help them identify and begin to learn correct grammar or syntax. Once they are more advanced, you could prompt them to look at a certain word or words. Sometimes students will make a mistake early in the sentence and will change subsequent words (and make more errors) to make a sentence grammatically correct. This can actually be a good sign that the syntax and grammar are starting to make sense to them, so I call those smart mistakes.