How the Rocket Money App Helps Manage Finances

Quick answer

• Rocket Money (formerly Truebill) automates bill negotiation, subscription cancellation, and budget tracking.
• It links to your bank accounts and credit cards to identify recurring charges.
• The app can help you find and cancel unwanted subscriptions.
• It offers bill negotiation services to potentially lower your monthly payments.
• Budgeting tools help you categorize spending and set financial goals.
• You can monitor your credit score and net worth within the app.

Who this is for

• Individuals looking to reduce recurring expenses and find hidden savings.
• People who struggle with tracking multiple subscriptions and bills.
• Those who want a consolidated view of their financial accounts and spending habits.

What to check first (before you act)

• Your Financial Goals: What do you want to achieve? Saving for a down payment, paying off debt, or building an emergency fund? Knowing your goals helps you prioritize features and use the app effectively.
• Current Cash Flow: Understand your income versus your expenses. This is the foundation of any budgeting or money management strategy. Rocket Money can help visualize this, but you should have a general idea beforehand.
• Emergency Fund or Safety Buffer: Before optimizing spending, ensure you have a cushion for unexpected events. A common recommendation is 3-6 months of living expenses. Rocket Money can help you track this, but having one established is key.
• Debt and Interest Rates: Identify any outstanding debts, especially high-interest ones like credit cards. Rocket Money can help track these, but understanding the interest rates is crucial for deciding repayment strategies. Check the official source or your provider for exact details.
• Credit Impact: Be aware that linking financial accounts can sometimes have minor impacts on your credit report, though typically not negative if done correctly. Understand how the app accesses your data.

Step-by-step: How Rocket Money App Works

1. Download and Sign Up:

• What to do: Download the Rocket Money app from your device’s app store and create an account.
• What “good” looks like: A secure account is created, and you are ready to proceed to the next step.
• Common mistake and how to avoid it: Using a weak password or sharing your login credentials. Always use a strong, unique password and enable two-factor authentication if available.

2. Link Your Financial Accounts:

• What to do: Connect your bank accounts, credit cards, and other financial institutions to the app.
• What “good” looks like: All relevant accounts are securely linked, and the app displays a summary of your financial picture. Rocket Money uses secure connections, often through third-party aggregators.
• Common mistake and how to avoid it: Not reviewing the permissions requested by the app. Ensure you understand what data Rocket Money will access and that it aligns with your comfort level.

3. Automatic Expense Categorization:

• What to do: Allow Rocket Money to automatically categorize your transactions.
• What “good” looks like: Your spending is accurately sorted into categories like groceries, dining out, utilities, and subscriptions.
• Common mistake and how to avoid it: Relying solely on automatic categorization without review. Manually correct any miscategorized items to ensure accurate budgeting and insights.

4. Identify and Cancel Subscriptions:

• What to do: Navigate to the subscription management section to review recurring charges.
• What “good” looks like: You can easily see all your active subscriptions and their costs, with an option to cancel unwanted ones directly through the app or by following Rocket Money’s guidance.
• Common mistake and how to avoid it: Forgetting to cancel a trial before it renews. Set reminders or use the app’s cancellation features promptly after identifying a service you no longer need.

5. Bill Negotiation Service:

• What to do: If you have bills like cable, internet, or phone, opt into Rocket Money’s bill negotiation service.
• What “good” looks like: Rocket Money contacts your service providers on your behalf to negotiate lower rates, and you receive notifications about potential savings. There may be a success fee for this service.
• Common mistake and how to avoid it: Assuming the service will always succeed or not understanding the fee structure. Be aware that not all bills are negotiable, and there might be a percentage of the savings taken as a fee.

6. Budget Creation and Tracking:

• What to do: Use the app’s tools to set spending limits for different categories based on your goals.
• What “good” looks like: You have a clear budget in place, and the app alerts you as you approach or exceed your spending limits.
• Common mistake and how to avoid it: Setting unrealistic budget goals. Start with achievable targets and adjust as you gain a better understanding of your spending habits.

7. Monitor Net Worth and Credit Score:

• What to do: Access the net worth tracker and credit score monitoring features.
• What “good” looks like: You have a clear, up-to-date view of your overall financial health, including assets, liabilities, and your credit score.
• Common mistake and how to avoid it: Panicking over minor fluctuations in your credit score. Credit scores can change for various reasons; focus on long-term positive financial behaviors.

8. Set Up Savings Goals:

• What to do: Utilize the app’s features to set up automated savings for specific goals.
• What “good” looks like: You are consistently contributing to your savings goals, and the app helps you track your progress.
• Common mistake and how to avoid it: Not automating savings. Treat savings like a bill and set up automatic transfers to make progress effortless.

Common Mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Not linking all relevant accounts	Incomplete financial picture, missed savings opportunities.	Take the time to link all checking, savings, credit card, and loan accounts to get a comprehensive view.
Ignoring subscription review	Continued payment for unused services, wasted money.	Regularly review your subscriptions via the app and cancel any you no longer use or need.
Over-reliance on automatic categorization	Inaccurate budgeting, skewed financial insights.	Periodically review and correct transaction categories to ensure your budget reflects your actual spending.
Not setting realistic budget limits	Frustration, budget abandonment, continued overspending.	Start with conservative, achievable budget goals and adjust them as you become more familiar with your spending patterns.
Forgetting about potential bill negotiation fees	Unexpected costs, reduced overall savings.	Understand the fee structure for bill negotiation services before agreeing to them. Check the official source or your provider for details.
Linking accounts without understanding security	Potential security risks, unauthorized access.	Ensure the app uses secure, reputable methods for account linking and review its privacy policy. Use strong, unique passwords and enable two-factor authentication.
Not reviewing the app’s insights regularly	Missed opportunities for improvement, stagnation in financial progress.	Make it a habit to check your Rocket Money dashboard weekly or monthly to review spending, progress towards goals, and identify areas for optimization.
Using the app as a replacement for financial planning	Lack of a holistic financial strategy, potential for poor long-term decisions.	Use Rocket Money as a tool to support your broader financial plan, not as a substitute for setting long-term goals, investing, or seeking professional advice when needed.
Not understanding the credit score impact	Unnecessary worry or incorrect assumptions about credit health.	Understand that linking accounts typically doesn’t hurt your score, but monitor your score regularly and focus on good financial habits for consistent improvement.
Failing to set up automated savings	Slower progress towards financial goals, reliance on manual transfers.	Automate your savings transfers to mirror bill payments, ensuring consistent progress towards your emergency fund, down payment, or other savings objectives.

Decision rules (simple if/then)

• If you have more than 5 active subscriptions, then use Rocket Money’s subscription cancellation feature because it can save you significant money by identifying and removing unused services.
• If your monthly bills seem too high, then explore Rocket Money’s bill negotiation service because they may be able to secure lower rates for you.
• If you struggle to track where your money goes, then link your accounts to Rocket Money and review its expense categorization because it provides a clear overview of your spending habits.
• If you want to save for a specific goal, then set up a dedicated savings goal within Rocket Money because the app can help you track progress and automate contributions.
• If you are consistently overspending in certain categories, then adjust your budget limits within Rocket Money because this will help you regain control of your finances.
• If you have high-interest debt, then prioritize paying it down before focusing on minor savings through the app because reducing interest payments yields a greater financial return.
• If you are unsure about the security of linking your accounts, then thoroughly research Rocket Money’s security protocols and privacy policy because your financial data must be protected.
• If you receive alerts about potential overdrafts, then review your spending and cash flow within Rocket Money because this indicates a need to adjust your budget or increase your emergency fund.
• If your net worth is not growing or is declining, then analyze your spending and savings patterns using Rocket Money’s tools because identifying the root cause is the first step to improvement.
• If you are considering canceling a service, then check Rocket Money first to see if they can negotiate a better rate before you cancel entirely because sometimes a lower price is available.
• If you receive a notification about a potential duplicate charge, then investigate it immediately using the app because these can represent errors or fraudulent activity.

FAQ

Q: Is Rocket Money free to use?

A: Rocket Money offers a free version with basic budgeting and subscription tracking. Premium features, such as bill negotiation and more advanced insights, require a paid subscription.

Q: How does Rocket Money make money?

A: Rocket Money makes money through its premium subscription service. They also may earn affiliate fees if you sign up for certain financial products through their platform, and they charge a success fee for their bill negotiation service.

Q: Is Rocket Money secure?

A: Rocket Money uses bank-level security and encryption to protect your financial data. They partner with third-party aggregators to securely link to your accounts.

Q: Can Rocket Money negotiate all my bills?

A: Rocket Money can attempt to negotiate bills from many service providers, including cable, internet, phone, and satellite. However, success is not guaranteed, and some bills may not be eligible.

Q: What happens if I cancel a subscription through Rocket Money?

A: When you request a cancellation through Rocket Money, they will attempt to process it for you. You will be notified of the outcome, and if successful, the recurring charge should stop.

Q: How often should I review my subscriptions in Rocket Money?

A: It’s a good practice to review your subscriptions at least quarterly, or whenever you receive your monthly financial statements, to ensure you’re not paying for services you no longer use.

Q: Does Rocket Money affect my credit score?

A: Linking your financial accounts to Rocket Money typically does not impact your credit score. The app’s primary function is to help you manage spending and savings, not to extend credit.

Q: Can Rocket Money help me get out of debt?

A: While Rocket Money can help you track your debts and identify areas to save money to put towards debt repayment, it is not a debt consolidation or management service itself.

What this page does NOT cover (and where to go next)

• Detailed investment strategies and portfolio management.
• Next: Explore resources on investing basics, retirement accounts (like 401(k)s and IRAs), and asset allocation.
• Tax preparation and complex tax planning.
• Next: Consult with a qualified tax professional or research IRS guidelines for specific tax situations.
• Mortgage applications and real estate transactions.
• Next: Look into resources on mortgage financing, home buying processes, and working with real estate agents.
• Estate planning and wills.
• Next: Seek advice from an estate planning attorney.
• Specific details on interest rates, fees, or legal limits for financial products.
• Next: Always refer to official product disclosures, your financial institution’s website, or consult with a financial advisor for precise details.