Yes, there comes a time when they have to make their own choices, but as long as you have a hand in their life, it is utter rebellion on your part to allow such behavior to go on. It is not merely a suggestion that you should raise up your children in the right way - but a command. Many times it's the parents' rebellion to God in this area that's inspiring their children's rebellion - both to God, and to them. The answer is not easy - but you have to start somewhere. Refusing to confront the issue may bring a momentary peace, but it will not uproot the sin from their heart.
Immediate action is necessary.
Sometimes previous plans need to be canceled or activities missed because of sin or lack of a repentant heart. Special privileges and allowances are also things that can be temporarily stopped or modified if necessary. Teenagers need a tremendous amount of prayer, love, and counsel, but they also need guidelines. In their hearts they are looking for someone to pull the reins in on them - their souls are crying out for it. They need the parent that God gave them to set up godly boundaries and to be diligent to see that they stay within them.