How to reset password for the Sparse Disk Image?

AFAIK you cannot. After all that is why you wanted to password protect the image. If there is a way for you to bypass or change the password, then it would allow anyone to do so as well. Unless you were provided with a recovery key or other method when creating the protected image there is nothing you can do. It is one of the risks of protecting or encrypting your data. If you were given a recovery key or other method when creating the protected image file, then you would use that to reset or remove the password.

You should always have frequent and regular backups of your computer and all external media (including the cloud) which contains important & unique data. I would add to this to make sure any data stored on an encrypted media (internal drive, external drive, or disk image has a backup copy of the data that can be accessed in case something happens to the encrypted drive or container/image file. It is definitely a lot harder to ensure proper backups when encrypted media are involved since you likely want the backups to be encrypted as well.