After familiarizing yourself with the exam using the Test Preview tool, take the first of the two practice tests. This is your baseline score. If your initial score is low, don’t worry—you haven’t started preparing yet. (If for any reason you’re not yet comfortable taking the first practice test, then switch steps #2 and #1). If you're not planning to buy paid exams 3-6, then I recommend saving the other free GMAT exam (test #2), and taking it as your final diagnostic shortly before your "G-Day."
If you have a little extra money to spend (GMAT prep is not cheap), then you should also strongly consider purchasing the Official Practice Exams 3 and 4 and the Official Practice Exams 5 and 6 for an additional $50 each (or save $10 by buying the Exam Pack Bundle). These contain four more official GMAT practice tests, giving you six real tests to work with instead of just two. While you're at it, you should also strongly consider buying the GMATPrep Question Pack 1 for an additional $30, which will give you plenty of questions you can practice on your computer, instead of just in a book (remember, the GMAT is a computer test and as such you should spend much of your time looking at questions on a screen). You can view all of those products in one place here.
Yes, these materials from the test maker are on the pricey side. However, official GMAT tests are invaluable, because although there are some companies out there who write realistic imitations of GMAT questions, they can never quite match the idiosyncratic nature of real GMATs. Moreover, only GMAC has access to the precise algorithms that determine your actual GMAT score. Tests from other companies are fine for practice, and necessary in many ways, but the only scores you can fully trust are these official tests from the test maker. If you do in fact purchase Official Practice Exams 3-6, then you could take the 6 tests at evenly spaced intervals throughout your preparation, which would provide you with twice as much information about your progress. Avoid the temptation to take all of these tests early in your prep, for the reasons discussed above
Pro tip: You can take each of the 6 GMAT Prep CATs more than once, because the GMAT is an adaptive test (it adjusts the difficulty level of later questions based on your previous responses). There are about 4 to 16 times as many questions in the GMAC's question pool as there are in any given test, which means that every test you take will be different. Tests 1 and 2 draw from a (gigantic!) pool of about 1,500 questions, and tests 3, 4, 5, and 6 draw from a more modest pool of about 400 questions each. To re-take your GMAT Prep tests, click "reset" in the lower-left hand corner of the GMAT Prep software window, but make sure to take screenshots of your previous test sessions beforehand--frequent screenshots are a good idea anyway because the software is prone to crashing and losing your data. For your screenshots, use either the "Print Screen" (Windows Key + PrtScn) button on a PC or (Shift + Command + 3) on a Mac. Thus, the 6 official CATs can easily turn into 12 or more CATs if necessary.
2) Purchase one, preferably two copies (the second copy should be left blank) of the Official Guide to the GMAT. The Official Guide (OG) will become your new best friend: it contains over 900 practice problems and a diagnostic test, as well as free online access to copies of the questions through your Wiley account. In addition, consider purchasing a (print or digital) copy of Brandon Royal's Ace the GMAT: Master the GMAT in 40 Days, which will serve as your all-in-one GMAT strategy guide and study plan. You will also find helpful free introductory materials on the web, on sites like GMAT Club and Economist GMAT.
Start working through these materials in an organized manner, but feel free to zig-zag as well. If you get stuck on something, then just mark the page, and move on. The idea is to get yourself familiarized with the test as much as you can before you start taking a class or working with a private tutor. Don’t worry about timing yourself just yet, but you might want to record how long each question takes you. You have around 2 minutes per quantitative question, and 1.5 minutes per verbal question.
Don't waste your time and money practicing on GMAT practice questions made by any third-party companies, especially on Verbal--these are merely inferior imitations of the real thing. If you must use other materials for test strategy, then that's fine, and in most cases necessary, but try your best to stick to official questions whenever possible.
3) Set a score goal. My students' GMAT student improvements are usually around 50-150 points, given time for sufficient preparation, and depending on the student’s starting score. To state the obvious: the higher your starting score, the fewer points of improvement you can expect. IR and Essay improvements are more difficult to predict, but are usually around 1-2 points. Check out this chart that shows you how GMAT Math and Verbal scores combine to produce a composite score.
Before purchasing time me or any other GMAT tutor, however, I would strongly suggest that you first schedule a phone consultation to discuss strategies and scheduling.
Working with a private tutor is the very best way to maximize your score, for a variety of reasons:
7) Study, Study, Study. Practice, Repeat, Forget, Practice, Repeat, Forget, Practice, Repeat…Remember. GMAT Study Plan - 2021 Edition (GMAT Club)
If it doesn't go well the first time, then remember that most students do better the second time they take the GMAT.
Update 7/16/15: if you do choose to cancel your score, then you no longer have to worry about the dreaded "C" showing up on your score report: the GMAT has discontinued this policy. You will also be allowed to retake the test after a 16-day time period, and you can take the GMAT up to five times per year.
The best way to prep for the GMAT is simple on its face, yet complex in its execution.