Travelling to London really needs a heavy pocket. With limited resources, I don't think I will be able to survive the city.. Can anyone suggest a simple and easy way to manage in London for a vacation?

you can use the London TI's website as a starting point:
http://www.visitlondon.com/people/budget/

Use Priceline for hotels, consider a hostel if traveling solo, or see if there are any specials at Travelodge or Premier Inn (or anywhere else, for that matter). Watch the dining expenses - look for cheaper Indian or ethnic restaurants, grab sandwiches from the likes of Marks & Spencer, etc. Take the Tube to and from the airport, and walk where possible. Limit the amount of shopping you do. Avoid high-cost attractions, like the London Eye.

If you are willing to go with a dorm bed in a hostel (except during summer), I would think that you could conceivably have a bare-bones stay for as little as $50 to $75 per day. If you can get a good deal with Priceline, I would think a couple could conceivably get by on $150 to $175 per day.

johnrodrick:

Have you checked out this website?:

http://www.londonforfree.net/index.php

How long, what budget and what are your main interests as a tourist in London?

Cheers, Alan
http://loraltravel.blogspot.com/

check out http://www.lsevacations.co.uk/ for a place to stay, if the dates work for you.

Concentrate on seeing free sights, of which there are tons. Walk a lot. Almost all the "iconic" sights of London are free to see, at least from the outside, and people watching and park walking are free, too. Use an Oyster card for public transport. Buses are cheaper than the tube (but we've never used buses so I have no personal advice.) Eat in pubs (for us always decent and more than filling food and no tipping and usually fast) and grab stuff from myriad of places (Marks and Spencers, Eat, PretAManger, etc.) that have prepared foods. If you can find affordable (whatever that means for you) rooms, be willing to not "fine dine," and avoid the costlier sights, then you can do it. But do try to afford The Tower of London if you can only fit in one paying site!

In our limited experience, about 20 days in 2 trips, in London, we averaged about $200/day for two, including B&B in very convenient spots with good breakfasts, lots of Tubing, meals and snacks, entrance fees, airport-to-room transport,and maybe even souvenirs.