Personal finance is like a balancing act. Everyone has budget woes or financial goals pulling them in different directions. The trick to finding the sweet spot is evaluating what you need, when you need it, and why.

Many Americans are dealing with a common struggle today — should you be saving your extra cash or funneling it into debt payments? While there’s no “one size fits all” answer, here are a few factors you should consider when tackling this big question.

In defense of saving

The most important reason to save money rather than pay off debts is to establish an emergency fund. If you happen to lose your job or have a medical emergency, it’s better to have an emergency fund set up than to put yourself into even more debt.

Typically, emergency funds amount to three to six months worth of living expenses. Having this safety net can potentially save a ton of money on future debts and interest rates.

All debts are not created equally

Another factor you should consider when determining whether your money is better spent paying off debts or saving is what kind of debts you owe. For instance, car loans typically have lower interest rates than credit cards. Student loans have even lower interest rates, with longer repayment terms.

If you have a substantial amount of credit card debt at a high interest rate, it makes sense to pay that off before saving. This is especially true if you have an emergency fund in place. If you are only managing an auto loan with a low interest rate, it may be best for you to prioritize saving your cash for upcoming expenses.

Future goals

Are you planning on retiring? Taking out a mortgage? Purchasing a car? If you know you have big purchases coming your way, save. This will help you pay for those expenses with more cash up front instead of financing an even larger amount.

While everyone’s financial situation is different, evaluate these factors to determine whether saving cash or repaying debts is right for you.