Sometimes, you need to take a break from implementing features or fixing bugs, and temporarily focus on repaying technical debt via activities such as refactoring. If you don't do so, then the technical debt will accumulate until you find it impossible to make any changes to your software, and even refactoring to reduce the technical debt may become impractical. But, you don't want to spend all your time refactoring nor to do so prematurely: you want to spend most of your effort on delivering improvements that are visible to users, and you cannot be sure of your future development plans and needs.
Typically, the decision about when to refactor or clean up code is based primarily on gut feel, emotions, or external deadlines. The ski rental algorithm offers a better solution.
Ski rental is a canonical rent/buy problem. When you are learning to ski and unsure of whether you will stick with the sport, each day you have the choice of renting or buying skis. Buying skis prematurely would be a waste of money if you stop skiing. Renting skis for too long would be a waste of money if you ski for many days.
Here is an algorithm that guarantees you never spend more than twice as much as you would have, if you had known in advance how many days you would ski. Rent until you have spent as much money as it would cost to buy the skis, and then buy the skis. If you quit skiing during the rental period, you have spent the minimum possible amount. If you continue skiing until you purchase skis, then you have spent twice as much as you would have, were you omniscient. (Randomized algorithms exist that give a better expected expected amount of money lost, but do not guarantee a limit on the amount of wasted money.)
You can apply the same approach to refactoring. For any proposed refactoring, estimate how much time it would take to perform, and estimate the ongoing costs of not refactoring (such as extra time required to add features, fix bugs, or test). Use the ski rental algorithm to decide when to perform the refactoring.
The problem with the ski-rental approach is that programmers are notoriously bad at cost estimation, and ski rental requires you to compare two different estimates. However, the alternative is to continue to make your decisions based on how much the code smells bother you -- an approach that is likely to waste your time, even if it satisfies your emotions.