When it comes to making good financial decisions, two straightforward steps can help: taking some time to understand your finances and monitoring your spending and saving on a regular basis.

A good place to start is determining your goals. Are you saving up for something big — tuition, a new car, a wedding? Or maybe you want to get a jump on building up a nest egg or are looking to slow down spending after a big out-of-pocket month. Once you solidify that purpose, you can work toward improving your financial wellness. These tips for making the most of your hard-earned dollars can help.

Create a budget

To make sure you're consistently spending within your means (in line with your income), it's a good idea to draft a plan or a budget. Start by recording how you spend every dollar. It may sound over the top, but it's the only way to know exactly where your money goes each month. You can do it in either of these ways:

• Make a list. Go the traditional route and record all your expenses — even the smallest ones, like a coffee — in a notebook or bullet journal. You'll be able to see how easily and quickly your expenses add up, and you might spot areas where you can cut back.
• Go digital. Try mobile banking to track your spending using an app you trust. With this method, you may be able to organize and categorize your purchases more seamlessly, to make managing your money easier.

Set savings goals

Not exactly sure how much you should have in savings? One good guideline, according to most financial advisors, is to start an emergency fund that could cover three to six months of expenses. That may sound challenging, but you can start with a small amount and build it gradually, setting savings goals as you go.

While you're plugging away at this, you might want to also try to sock something away for bigger expenses in the future like a wedding, a house or a vacation. One way that people with super savings practices do this is by easing into new habits, like automatically depositing a portion of every paycheck into their savings.

Saving for retirement? You may want to consider setting up an individual retirement account (IRA) or contributing to your company's 401(k). Both 401(k)s and IRAs offer tax benefits, either when you contribute or withdraw money, but keep in mind there are usually penalties for early withdrawal.

Diversify your savings

If you are able to set aside money in a traditional savings account while building up an emergency fund or saving for a shorter-term goal, that's a great step toward building wealth. Consider giving your accounts names like "My Next Car" to motivate you to keep these savings goals top of mind.

It can also be smart to diversify your saving methods when you can. For example, low-risk, higher interest savings options such as CDs or money market accounts typically earn more than a regular savings account while still offering access to cash. You'll want to think through the pros and cons of CDs and money markets to figure out the best approach for you.

Maximize a 401(k)

If your company offers a 401(k) plan, take advantage of it — it's never too early to start planning for retirement. Contributions reduce your taxable income and, on top of that, companies often match 3% to 6% of employee contributions, in effect doubling your savings. To make the most of compounded interest, it's helpful to invest early in your career and often. And as you near retirement, it may make sense to check in for a 401(k) tune up.

Another way to put money away for retirement is to work with your bank to set up automatic deposits. This way, a percentage or designated amount of your paycheck can go right into a savings account or an IRA systematically.

Get guidance from a financial advisor

Consulting a professional for a financial checkup can be worthwhile. Financial advisors are able to help you establish long- and short-term savings goals, develop plans to pay down debt and offer advice on improving credit scores. They can advise you on how to roll over 401(k)s, consolidate accounts, diversify investments, make changes to your stock portfolio and help with long-term financial planning. It can be a good idea to choose a fiduciary who is not affiliated with any investment entity or to ask for advice at your bank, credit union or brokerage.

Be strategic with credit and credit cards

Understanding how credit works is key to bringing your financial picture into focus. One important aspect is your credit score, the number that represents the information contained in your credit history. This number is checked by renters, lenders, utility and cell phone companies, among other businesses, so a high score is a valuable goal.

One way you can build credit is by applying for a credit card and demonstrating responsible credit card use. You'll want to first evaluate the terms and conditions of a credit card reward program as well as the costs associated with that card before choosing to apply (or when you're reassessing your current cards.) Consider credit cards that enable you to earn something each time you use it, whether that means cash back cards, travel rewards cards or points-based rewards cards. You can put rewards toward reaching a goal, like a vacation, or toward gift cards.

Manage spending wisely

What kind of a spender are you — one who is selfless or spontaneous, or more of a planner? When you have a sense of your spending profile, it can be easier to curb excessive spending and ramp up your savings. Impulse purchases can be tempting but they can also break your budget, so a better move is to save up for purchases instead. To start whittling away at your interest credit cards and loans, you might even want to embark on a spending fast for a week or two. When you buy only what you need, you can be surprised by how much you're able to put away.

— With additional reporting from Life and Money by Citi editors.