I've observed with my own experience that if phonetics are taught nicely at an early stage the child faces less problems while writing spellings. My 7 yr old daughter invents her own spellings and they sound  phonetically right. like for example I use my dictionary quite often so I decided to cover it . When I returned to pick my dictionary I saw on it written with sketch pen DISHNARY OF ENGLISH. It was my daughter's work. I was very pleased to see her effort.

A child may not know the grammatically correct form of a word but if he is trying to percieve the word with his own mental ability, I think it should be encouraged and appreciated gradually the child should be exposed to the correct spelling form. But sadly, In India, I have noticed Teachers are not teaching phonetics properly in many schools rather they fill the child's copy with red marks. This inturn causes adverse effect on child's confidence. The teachers are so hellbent on the correct form of spelling that they fail to develop the cognitive skills in children as a result the child simply aquires the skill of cramming! I think teachers should be trained in this regard to pay more emphasis on the phonetics and pronunciations for the better aquisition of a language.