Use a pencil to draw small oblong or kidney shapes in the top left or right-hand corners of your letters. These will be left white (or unshaded). These areas of "shine" will designate the areas where light will be hitting your letters, giving them a 3-D effect.
Use pencil crayon or marker to outline each letter, just inside the edges of each letter. This creates a buffer so that you are less likely to color outside of the lines.
Use sharp quick lines to shade the entire piece in a solid color. Each letter can be a different color, as long as it's solid.
Outline each of the shine spots with a hard, solid line in the same color as the rest of the letter. Or, use soft circular strokes with the pencil crayon around the edge of the white spots to blend the spot into the color of the letter for a more natural effect.
Start shading in the letters by outlining letters just inside the edges and moving toward the middle.
Use linear strokes to color in each letter until they are all equally shaded in.
Use a white poster paint marker with a thin tip to add in the light source. On block letters, the shine comes out more linear and should follow the lines and corners that the imaginary light source is hitting.
Divide the letter horizontally by the number of colors you want in the letters.
Use pencil crayon or marker to block out each each divided area with solid color. The colors should meet at the point that they will be blending.
Layer the two colors where they meet to create a blended effect.