We often face financial dilemmas in life, but few are as persistent and challenging as the perennial question: Should we pay off our debts or save for the future? Which is more important and where should we prioritize our money? Here are five relevant questions that can help guide your decision.

1. Do you have high interest debts?

High interest rate debt, such as credit cards, can add up quickly and put significant pressure on your finances. For example, the average annual percentage rate (APR) for credit cards is about 18.16%, while the average yield on a 5-year Certificate of Deposit (CD) is only 1.06%.

If you have debts with high interest rates, it is generally advisable to prioritize them and pay them off. This will free up funds to save and pay other debts in the future.

2. Do you have an emergency fund?

An emergency fund is essential to help you cover unforeseen expenses, such as car or home repairs, medical emergencies, or even essential costs if your income decreases or you lose it.

If you haven't already established an emergency fund with at least three months of essential expenses, this should be your next goal. At the same time, make sure you continue to pay at least the minimum on your loans and credit cards.

3. Are you thinking about retirement?

Saving for retirement is crucial and can be very beneficial, especially because of the power of compound interest. In addition, contributions to certain retirement plans can reduce your tax burden.

You can't borrow for retirement, so make saving for retirement one of your top priorities. In the meantime, continue to reduce your debt.

4. Do you have any other debts?

You may have other debts, such as car or student loans. If the rates and terms of these loans are reasonable, you can continue to make monthly payments. However, for loans with higher interest rates, you might consider making larger payments to pay off these debts faster. This will allow you to save on total interest and free up more money for your savings goals.

5. What are your other goals or needs?

Once you have your high-interest debt under control, have established an emergency fund and are contributing to your retirement, you can begin to consider other savings goals. These may include saving for a new car, your children's education or a down payment on a home. You can even start thinking about more fun goals, such as travel or hobbies.

Finally, there is no one-size-fits-all answer when it comes to balancing savings and debt repayment. It all depends on your unique financial situation, your goals and your tolerance for risk. However, by asking yourself these five questions, you can get a clearer idea of where your priorities lie and how you can best balance your financial obligations.