If I'm really honest, I'll admit one of the most challenging things I've done while teaching elementary math is getting children to conquer the often-dreaded word problem. I'll also admit that it's one of my favorite because I love the joy of seeing the lightbulbs go off in a child's mind. May the advice below help you become better at demystifying math word problems for your students.
Have a great overall strategy. One of the strategies I've often used is understand the question being asked [i.e. highlighting key information and ignoring extra data], choose a strategy according to what's being asked [e.g. draw model, add/subtract, inverse operation], solve using the strategy, and then check the work to be sure you actually answered the question well. Consistency is something I've found to help students be confident in attacking word problems.
Use context clues and swap it out. When faced with unfamiliar names and terms that aren't math-related, use the other words in the paragraph to help you figure out what the word means. Particularly with proper names and places, swap them out for names and places they're familiar with. You'll have to model this process aloud to make it effective so they won't get too bogged down with the swapping that they miss assessing what is being asked in each problem.
Speaking of vocabulary...math vocabulary is a must. There's no way of getting around it, especially if they are asked to find the sum or the greatest common factors and they are clueless as to what these things mean. Interactive dictionaries, games, and rhymes are great ways of getting kids to learn, and you can use these along with other words they're learning in their other subject areas.
Think it through. This is especially important for problems requiring multiple steps. Get kids to think about the operations and strategies needed to solve the problems. Oftentimes kids will only do one step, which provides an incomplete answer.
Have tons of "tools". One of my high school math teachers used to say that there's usually more than one way to solve a problem. Haven't mastered all the multiplication facts? Draw an array. Can't regroup in addition? Use partial sums. Struggling with fractions? Create a model. If it's a feasible strategy, encourage students to use what they know and build their confidence in doing multiple strategies.
Write originial ones. Whether they're in first, fourth, or twelfth grade, students are capable of writing their own problems. Bonus points if you then get other students to try and solve them after working out the solutions beforehand, followed by sharing their strategies for attacking each one. Depending on the class' needs, I introduced this after we've worked on this collaboratively in class and I modeled how to attack solving math problems.
What will you do to help your kids learn this important skill?