how to reset my 3gs iphone without loosing contacts and information

hello

my phone is in froze condition and is asking me to restore and update. i don't know how to do it. i have already unlocked the phone for worldwide usage. i hope i don't have to pay again to restore my phone and plus i want all my important information and contacts to stay as i have not backed up my phone since i got it unlocked. what is the best way to fix the sign displaying on the phone with a usb cable on the screen

thank you

bubbu aulakh