Regardless where we stand on how much privacy and leeway teens get with their allowance, some parameters must set or you’re going to be nickeled and dimed to death before you know it.

Teenagers are master manipulators when it comes to money. That’s why it’s such a good age to teach them sophisticated money lessons. When I watch those crafty little wheels spin I know there’s no need to wait until college to teach kids finances.

Here are 4 decisions we all need to make. It’s less important what those decisions are than the fact that they’re made, and put in writing. Make the decisions with your teenagers, have them take the lead, have them write it down. You can both sign it. They’ll take ownership of the contract, and you won’t get into arguments later.

1. Depending on your household economic situation is, decide if allowance is purely spending money, or if it must contribute to the household. If it’s affordable, I would encourage that it’s just spending money. If they earn it, having a certain freedom associated with it is a great motivation builder for being a good earner.

Make a list of what they’re expected to pay for with their allowance. This will also help you set the price of allowance. For instance, if you still pay for activities—movies, concert tickets, going to a fair—and they only pay for products they want, then a dollar for each year they’ve been alive might be okay. But if they have to pay for the movies, or entry fee to a special event, then they need more money because it’s expensive to do those things.

Make a list. Have them come up with the list once you decide the parameters. For instance, tell them that they’re responsible for all the products they want to buy and are constantly asking for. Having them make a list of them makes them really take a look at what they want so badly. Their priorities might change.

2. Rules for what parents pay for. Same drill as #1. You write down, while they witness it, what you’ll continue to pay for.

Danger zone: You can include food, water, shelter if you want. I actually advise against that. It can hurt their feelings and create distance to send teenagers the message that they’re all grown up and it’s a burden to house them. To reduce your cohabitating relationship to a business arrangement with an adult is quite a comment on intimacy. I hear this advice and, honestly, guilt trip, a lot, and I think it’s dangerous, even if the intention is good—to not coddle, to teach them hard lessons about the realities of the world and what things cost; to keep them from being bratty and demanding.

But there are other ways, and here’s what scares me about the “I put a roof over your head” approach: The reality of our world is that there’s a lot of danger to teenagers. We all know this: drugs and promiscuity cause disease, among other things. They’re at an age where they must rebel—must go through a stage of antithesis, in order to grow. Early childhood is the thesis statement of life; you are a product of your parents. Teenhood is the antithesis, where you rebel to see the world differently, to test your independence, which is vital to self care later. In adulthood, we reach synthesis, which is who we end up being. It’s probably a mix of where we came from and what new things we took on.

If, as a parent, you create too much distance during antithesis, then you run the risk of teenagers never confiding in you. When they rebel, they might run to extreme decisions to feel independent. I’m not saying that there’s a direct corollary between the roof over your head speech and teens doing drugs. But I do think that they are far from grown up when they’re teens, and the message that they owe you as if they’re adults will prevent them from coming to you for emotional parenting when they need it the most.

I want my daughter to confide me when she’s thinking of having sex with a boyfriend, or if she wants to try something potentially dangerous, or if she’s not in any shape to drive home and needs help.

So I have to say go easy here to teach lasting, productive money lessons. Money is something so many adults have anxiety about, and I have to say I think some of the anxiety comes from lessons they were taught as teens. Start out small, with the discretionary stuff, see if they are becoming more responsible just from this approach.

You can’t really go wrong arguing about who pays for concert tickets and who pays for the ridiculously expensive jeans your daughter must have. If you make the lesson about the goods and services the teenagers are interested in, they’ll be interested in the money lesson. And that’s more than half the battle.

Try at least to save the roof over your head until all else fails.

3. What is the division: spending, saving, giving to charity? Please do check out my posts on Spending Wisely and Saving Wisely for tips on how to spend allowance. But before that, do decide if all the money you give teenagers is for spending. If you can afford, up the amount each week—at at least $25-$30 and use the opportunity to really teach some money lessons that include investing and helping others.

If you do, definitely get a reloadable prepaid card for your kids. Load the money on each week, and then have them deal it out to spending, saving, and charity. I’m personally a fan of the triumvirate. My daughter has donated to saving animals with at least some of her allowance since she was 6.

Now she thinks about others, is the first one in the house at Christmastime to go in search of clothing and games we no longer use to give to Toys for Tots, Salvation Army, Goodwill, and the local shelters. Very important money lesson hidden here. Take your kid to churches or other donation spots when you donate. Show them what it’s like to live without means.

4. When do teens get extra money?

I’m a sucker for certain things, I admit it, so when it comes to things like proms I not only agree to pay for the dress or suit, but all the acoutrements—the jewelry, the gas for their car if they have one, money to go out with after, the corsage.

I actually think you don’t tell the kids this part. Surprise them on special occasions. Treat them when you feel like it makes sense, or when you can afford it. My daughter recently went to a charity dance for the SPCA (Society for the Prevention of Cruelty to Animals). She not only gathered up her allowance that week, but dug out everything she had hoarded in her “spending purse” and was prepared to bring every cent she had on her person to that event. In the car, I told her to put her money away, I wanted to make the donation on her behalf. She donates a lot. She agreed to let me pay half, but she wanted to give some, too.

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It may sound odd, but bear with me here. Get your kid a credit card—a bona fide credit union Visa or Mastercard you’re probably going to have to co-sign. It won’t work just to put them on yours. The point is to help them establish credit so one day they’ll move out of your house and into a mortgage of their own. Keep your eye on the ball. Make sure to get them a rewards card.

What about that little potential disaster, where they could ruin their credit forever if they run up bills you can’t pay? Before you join my husband in thinking I need serious psychiatric help for coming up with this idea, just hear me out:

Get a credit card with a very low limit, so even if the kids royally screw up, betray your trust, and buy a Wii with the card in the first five minutes they’re alone at the mall, it can’t harm you too much. With credit issuers pulling purse strings tight these days, it will be easier to get a low limit card anyway. Seriously, get a limit amount like $250.

Which brings me to the method of training them about what that credit card limit means:

If your kid lives at home (a teen or a college student), put them in charge of grocery shopping. If they live elsewhere, they can do their grocery shopping on the card.

If the card limit is low enough, it will make it a challenge to buy groceries, which is of course the point. Your kid won’t be able to say they tried but the bill was more so they spent more. They’ll have to rifle through items at the checkout counter and put things back, until they get the hang of it.

If you normally pay for your college students’ groceries (they live off campus, they’re not on the food plan, you supplement anyway), then you’re just paying the credit card company instead of handing out money, all the while establishing credit, which is getting harder and harder to establish. What an early advantage for your kids

If you are not comfortable starting out with a credit card, get a reloadable student debit card. Every kid is different, and maybe yours just isn’t ready to be trusted with a credit card, even with strict boundaries. If not, put training wheels on that Visa-logo card. Make it a reloadable student debit card

This card won’t establish credit for them, but consider it the prerequisite training class for the co-signed credit card. It’s great for teens, too, because you can load their allowance on it.

You simply go online, log in to their account, and load money onto the card. So, if your kid is a spendthrift, send them to the grocery store with just $20 loaded, and a list of a few items. Expose them to responsibility gradually.

Gradual exposure is a great phrase to remember for any new experience, and money management is no exception. The reloadable student debit card works anywhere a Visa debit or credit card works, and it’s better than cash because you can monitor what they’re spending. Just go online, their purchases appear the same way credit card line items do.

When you see good behavior, reward the kid with a co-signed rewards credit card. And tell them all about what they will be able to earn with that credit card.

Incentives for both the credit card and reloadable debit card kids. For kids who live at home, give them a grocery list of must-haves, and tell them once they have bought all the requirements, they can get whatever they want with the rest of the budget. Send kids together if you have more than one, and give them enough extra money to get less than what they want. They’ll have to negotiate and compromise which extras to get.

Send them to a different grocery store each time in the beginning, so they see the difference in prices. Comparison shopping experiences are a great way to teach value, and make people think twice. And for items that kids use, like food, they’ll remember the prices, especially when they find a good deal.

Their reward will be points they accumulate on their reward cards. Maybe they’ll get free stuff, an airline discount. Do make sure it’s a rewards card. You have to be careful here, though. Reward cards reward people for spending more. You want them to find the best deals at the grocery store, get the most for their money.

So hedge your bet. First and foremost, their reward should be cash: Say you give them a $250 limit to do the grocery shopping. If they comparison shop, really find deals, they might have $20 left over. If they do, let them either buy junk food or keep it. Make their first goal to get a commission on the job.

Let them learn that reward points are rewarded for what you need to spend and no more.

Remember, they used to teach grocery shopping in the 1950s in high school home economics class. The kids can handle it. At first, you may eat some disgusting food when they buy the wrong things, but you’ll live, and you can always exchange it when they’re not home.

This concept can become expansive, too, as they become responsible. You can add other acceptable merchants to their list: school for tuition, or rent— all those expenses that can be put to use helping them establish credit. They will also see credit as a convenience and system to earn rewards, not a vehicle for buying more than they can afford per month. They should own and operate a credit card without revolving credit. That’s the habit to establish.

After a while, let them pay the credit card bill every month, either by auto-payment from their checking account, or if you’re daring, by letting them write checks. The trick will be to see if they remember to do it before incurring a finance charge. If they do well with it—never incurring a finance charge—you can reward them with something to go with their frequent flier miles: a ski or beach trip.

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