What is the primary purpose of an emergency fund?

The primary purpose of an emergency fund is to provide financial security for unexpected expenses. This fund acts as a safety net, helping individuals manage sudden financial burdens such as medical emergencies, car repairs, or job loss without resorting to high-interest loans or credit card debt. By having an emergency fund in place, an individual can cover essential expenses without derailing their financial stability or long-term goals.

While other options may involve financial planning aspects, they do not focus on the specific contingency of unexpected expenses. Investing in stocks and bonds or accumulating wealth over time requires a different financial strategy, while saving solely for retirement does not address the immediate need for liquidity and security that an emergency fund provides. Thus, option B accurately reflects the fundamental role of an emergency fund in financial planning.