What is the main purpose of an emergency fund?

An emergency fund is designed to provide a financial safety net for unforeseen circumstances such as unexpected medical expenses, job loss, or major repairs. The primary purpose of having an emergency fund is to ensure that individuals have access to sufficient liquid cash to meet immediate needs without resorting to high-interest debt, like credit cards or loans. By having this fund, one can effectively navigate financial emergencies instead of being caught off guard and potentially falling into a more precarious financial situation.

The other choices represent different financial goals that do not align with the fundamental purpose of an emergency fund. Investing in stocks is aimed at growing wealth over time rather than addressing immediate financial needs. Covering luxury expenses does not pertain to an emergency, as emergency funds should be reserved for true financial crises. Lastly, funding long-term savings is a separate goal focused on retirement or future investment rather than immediate liquidity needs. Therefore, the key function of an emergency fund is to provide quick access to cash for urgent needs, making "to obtain money quickly for immediate needs" the correct emphasis.