(The magnet letter and popsicle stick idea is something I saw somewhere on the interwebs.)
Step 1 Save random advertising magnets over the years (or pull one from your fridge) (or buy a sheet of them) (or buy a sheet of valentine magnets from dollar tree and use the edges between the shapes)
Step 2 Write whatever words or names you want on popsicle sticks.
Step 3 Cut magnets into strips and glue to the back of each.
Step 4 Then just fish through the refrigerator magnets for the letters needed for your words (I decided to take out unused letters to save space and make it easier to find the letters needed.
Waalahh!
An easy and free (assuming you have everything in craft supplies) to make, educational activity that will contain itself (and great for travel!)