Hi..firstly please don't opt for any packages!! stay in dorms or hostels or you can also inquired about any homestays .
use govt buses for transportation (Tamil nadu govt buses are very well Maintained and are always on time) to explore the city please use shared cab. Eat at local shacks.
Travel in night better with a reservation in train that would save your money by not necessarily staying in a hotel. next thing to do is try using local public transport for travelling in the city and another thing is use Google for assistance rather than hiring a guide but don't compromise with food I say eat the best. 😉
Stay in a not too luxury hotel. You can explore a standard hotel on MMT/Yatra/Expedia/Goibibo/Booking/Hotels/Agoda. etc. If you are a group of people, a cab would work out to be cheaper as the expense can be shared.
There's a Hostel brand in Ooty called Zostel. You can take a bed in a dorm there. That will be cheap plus you will get a chance to meet and interact with fellow travelers. Are you traveling solo or with someone?
Definitely go for Zostel. Ask them for suggestions for places to visit rather than travelling with a package. In the main town, just walk around to soak the place in. Go to the local markets and absorb the culture. Keep a day or two aside for visiting the scenic locations, but try exploring more than touring through the place.