Salt also works well (and the colors are brighter). Here's
what I do. Method 1: Place sand in a pie tin (or other flat
container) and rub colored chalk over it (on the side of the
chalk). As the chalk becomes dust, it mixes with the sand and
causes it to become colored. Again, the colors are brighter
when you use white salt instead of sand. Method 2: Using liquid
watercolor, put a few drops in the baggie along with the sand.
Mix until the color desired is reached. Spread out in a flat
box to dry. Store in plastic baggies.
I've done both methods. The watercolor is faster but the chalk
makes better colors. Plus, the kids love making the colored