I just did this last week for $18.50 (American). My "Old Reliable" is a Yamaha F310.
First, buy a Tusq bridge. The model I bought is PQ-9110-00. I have no idea if that's the best model for the job. You want one that's a little bit thick.
Next, buy a set of light strings. I bought D'Addorio Silk and Steel .011's.
Remove all the old strings from your guitar. Be careful to set the end pins neatly to the side so that you can remember which goes back into which hole. If you are still using the plastic ones that came with the guitar, this would be a good time to replace them with bone or wood or something with better resonance than plastic.
Gently pull the old bridge out of the guitar - being careful to note which end is the low E and which is the high e. It ought to come out easily. Test the new bridge to see if it's a good fit. It ought to go in easily without being wobbly. Mine was a little teeny bit wobbly, so I used a little Gorilla Snot.
Take the opportunity to clean up the guitar. Vacuum the dust from the inside, clean the wood, oil the fretboard and bridge with some lemon oil. That sort of thing.
Now, place the tops of the two bridges together. With a very, very sharp pencil, mark the bottom of the old plastic bridge on the new Tusq bridge by drawing a line across while you pinch the two bridges firmly together to prevent slipping while you mark.
If you have a pad sander handy, great. Put on some fine grit sand paper. If you don't have a pad sander handy, you're going to need some fine sandpaper and a board or tabletop. On either the pad sander or the sandpaper spread out on a broad, flat surface sand down the Tusq saddle until you get to the line. Be absolutely certain that you are sanding it FLAT and square. You do not want any rounding either on the narrow or on the long edges.
Now if you want to lower the action a little, which I did, then sand a bit more. Make the Tusq saddle just a little bit more shallow than the original plastic saddle.
Once you've reduced it a little, then place it in the guitar and restring with your new strings (again light strings on that guitar help).
You've now got a lower action guitar.
Don't make too big of an adjustment. Very, very tiny adjustments make a huge difference in playability. Go too far and you'll mess up the intonation (tuning up the neck) and you'll also get fret buzz by having the strings too close to the frets.
The strings were $7.50 and the Tusq saddle was $11. So for $18.50 and a half hour of fidgeting, I got my Yamaha F310 set up with a low action that is barre chord heaven.
Granted B chord amnesty by King of the Mutants (Long live the king).
If it comes from the heart and you add a few beers... it'll be awesome! - Mekidsmom
When in doubt ... hats. - B.G. Dude