New Delhi: According to research, lessons learned early in life help shape people’s financial behavior. Although foundational institutions such as schools and colleges often provide a level of financial education awareness, it is also the responsibility of parents to sow the seeds of financial literacy and practices. Understanding the difference between saving and investing, as well as starting to plan for retirement early, can be very helpful.
While parents can teach their kids the importance of good financial planning and explain the basics in a helpful way, it doesn’t hurt to have some fun once in a while! 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 some quality time with your kids and taking a fun financial quiz? Here are 5 questions you can ask your kids, along with some tips and tricks:
When is the best time to start your financial planning?
Expert Tip: Planning early is the first step to financial and social security. People don’t pay attention to the importance of early financial planning and put it off thinking the years are going away, and that’s a big mistake. It is recommended to start with your first job. For the best information, constantly read about financial planning and portfolio management that would help you avoid any pitfalls. You can start with the basics like online fixed deposits or life insurance plans with a minimum/standard premium.
How should a budget fund?
Expert Tip: The best way to budget your finances is to calculate net income and break it down into needs, wants, and savings. This is a popular rule of thumb that will help you balance your spending and get your money into the right basket. To save money, it is important to set realistic goals. Investing a fixed amount each month in the right plan will help you get a visible return on investment. Not only budgeting, but timely budget review is also an important step.
What should be the first financial tool to invest in?
Expert advice: Choose policies, plans that are easy to invest in while providing comprehensive financial protection. In this sense, products such as term life insurance plans are a prudent investment choice. Term plans are the purest form of life insurance that provides comprehensive financial protection against life’s uncertainties, also providing protection for future goals. It is one of the most economical insurance policies, guaranteeing high coverage at low premiums.
What should his investment strategy be?
Power User Tip: To get long-term value from an investment portfolio, it’s a good idea to diversify your investments rather than keep all your fruit in one basket. According to a recent survey, 43% of urban India invest in term plans, 39% in savings and 19% in market-linked plans. It is advisable to always maintain a balance of investments like life insurance, FDs, bonds, stocks, mutual funds, etc.