When I powered on the phone for the 1st time, I did without a sim card. it told me that it needs a sim else its calling the police & blah blah, but I was able to connect it to wifi, do major updates and then put in my sim card without having to waste the data limit on my sim card.
Am not sure how your settings is eatin 300+ MB, mine is just 60MB~, but you should be able to get that data via wifi.
Install "Lumia Pusher" app and it'll show you the lumia apps that have an update available by forcing them to update instead of waiting.
But make sure you remove your sd card (if there is) and take proper backup of music, vids and pics.
Your 300MB settings are not backed up, just a small portion of it is
.
Imagine a building, the bricks and cement is 300MB, while the layout of how those bricks are laid is your backup which is am not sure maybe under 10MB?
So if you do a backup, your layout plan is backed up, but if you format it, the layout plan tells the phone how the bricks are to be laid, but again you can do it via wifi without hitting your monthly data limit.
If I were you I would backup the settings periodically, maybe once a week via wifi to save on data plan? Since I have a good plan, I let it 'on', am not even sure when it backs up lol but I don't reset the phone every now and then.
Also turn off the skydrive app, it also consumes other storage.
Another tip is to go to 'storage check' area and see what app is eating your space, consider removing it, rebooting/soft resetting the phone and reinstalling the app.
i find facebook app is a big hog for the phone memory and also whatsapp. Email/Contacts can also chew up on space.
I feel pity for people living with 8GB, no expansion phones sometimes.
LOL @ This phone is getting expensive, sorry couldn't help.