What is the primary goal of emergency savings?

The primary goal of emergency savings is to cover unexpected expenses. This type of savings is specifically designed to provide financial security and peace of mind when unforeseen circumstances arise, such as medical emergencies, car repairs, or job loss. Having a dedicated fund for these situations ensures that individuals can manage unexpected financial burdens without going into debt or compromising their financial stability.

In contrast, earning high interest typically relates to investment accounts or savings strategies that aim for growth, rather than providing immediate access to funds in times of need. Using savings for planned vacations does not align with the purpose of emergency savings, as vacations are foreseeable expenses that can be planned for with separate funds. Lastly, while investment opportunities can be valuable for wealth accumulation, they do not fulfill the immediate need to access funds for emergencies, which is the priority of an emergency savings fund.