“If they get two paychecks a month, we suggest they reserve half of one and half of the other for expenses they need to cover monthly, like car payments and insurance,” says Paul Richard of the National Center for Financial Education in San Diego. “They should also set a savings goal and set aside some portion of all the income they receive for that.” He recommends saving at least 10 percent.

Beyond that, Richard says, “Teens should be free to spend it as they see fit, on clothes, entertainment or anything else. We encourage parents to pay attention and give good advice, but if kids make lousy spending decisions, it’s far better that it happen at 14 or 18 than at 25 or 35, when a lot more is at stake.

“Sometimes you just have to let them waste money and then, after a few weeks have passed, try to review with them what they learned,” he adds.

A teen may embrace saving once he or she sees how fast a small amount can build up, especially with interest. In one year, for example, skipping fast food one night a week could help a teen save more than $250.

“We encourage kids to start with a goal and think in terms of alternative choices,” says Linda Childears, president of the Young Americans Education Foundation (an arm of Denver’s Young Americans Bank). “Their goals are much more short-term than most adults would think of — to acquire a dress or rent a limo for prom, for example, or to get a stereo for their car. But the principle is the same — to save to achieve a goal, rather than borrowing for it or trying to pay for it all at once.”