Paying off debt and becoming completely “debt-free” is a major accomplishment. However, being debt-free isn’t a goal everyone should chase — for many reasons.

Not all debt is the same, people have different financial goals, and some may find managing debt easier than others. Here are some tips for when you should put a hold on extra debt payments and when that cash may be put to better use.

Good Debt Vs. Bad Debt

All debt is not created equally. The difference is whether your debt is considered “good” or “bad.”

Good debt is considered an investment. Typically, good debt includes a mortgage or student loans. Bad debt, on the other hand, is associated with spending and depreciating assets. This can include credit card debt and auto loans.

Financial Mappers

Regardless of whether your debt is considered an investment or not, what determines whether it’s “good” or “bad” really comes down to interest rates. Mortgage and student loans usually hover around 4 percent interest, while credit card debt can hit around 17 percent. If you have low interest rates, consider putting your loans on autopay and focus on accomplishing other financial goals.

Understand Your Financial Future

Speaking of financial goals: Are you in the market to retire? Do you have an emergency fund? Will you need to save cash now for future expenses?

 Fin Pin

These are all questions you should ask yourself when evaluating whether or not to pay down debts faster than expected. While there’s no cookie-cutter approach to these questions, it’s better to save money for future expenses if you have them in mind. Paying off debt faster than expected will only leave you with less cash come spending time.

How Much Is Too Much?

At the end of the day, people need to determine their debt tolerance before taking on new debts or paying off old ones.

Letters To The Next President

If your debt keeps you up at night, you should probably pay it off as fast as possible. However, if you have low interest rate debt and find it manageable, consider saving extra cash for upcoming financial goals. The key to personal finance is balance; so only bite off as much debt as you can handle.