According to research, lessons learned early in life help shape people's financial behavior. While foundational institutions such as schools and colleges frequently provide a level of awareness toward financial education, it is the responsibility of parents to sow the seeds of financial literacy and practices as well. Understanding the difference between savings and investments, as well as getting an early start on retirement planning, can go a long way.

While parents can teach their children the importance of good financial planning and explain the basics in a valuable way, it doesn't hurt to have some fun now and then! According to the Financial Industry Regulatory Authority Foundation, only one-third of Indians can pass a financial literacy exam, compared to two-thirds of Americans.

Why not put it to the test this Father's Day by spending quality time with your children and taking a fun financial quiz? Here are 5 questions you can ask your children, along with some tips and tricks:

When is the best time to start your financial planning?

Expert tip: Planning early is the first step towards financial and social security. People do not pay attention to the importance of early financial planning and put it off believing it's years away, and this is a crucial mistake. It is recommended to start as early as you join your first job. For the best insights, constantly read up about financial planning and portfolio management that would help you to avoid any traps. You can start with the basics like online fixed deposits or life insurance plans with minimum/standard premium.

How should one budget finances?

Expert tip: The best way to budget your finances is to calculate the net income and divide it into needs, wants, and savings. This is a popular thumb rule which will help you balance your expenses and put your money in the right basket. For savings, it is important to set realistic goals. Investing a fixed amount every month in the right plan will help you earn a visible return on investment. Not just budgeting but reviewing the budget timely is also an important step.

What should be the first financial tool to invest in?

Expert tip: Opt for policies, and plans that are easy to invest in while ensuring holistic financial protection. In that sense, products such as life insurance term plans are a prudent investment choice. Term plans are the purest form of life insurance that provides comprehensive financial protection against life's uncertainties, offering protection for future goals as well. It is among the most economical insurance policies, ensuring high coverage at low premiums.

What should be one's investment strategy?

Expert tip: To achieve the long-term value of an investment portfolio, it is recommended to diversify the investments rather than keeping all your fruits in a single basket. As per a recent survey, 43 percent of urban India invests in term plans, 39 percent in savings, and 19 percent in market-linked plans. It is advisable to always maintain a balance of investments like life insurance, FDs, bonds, shares, mutual funds, etc. (AA/IANS)