Make "no" the first word out of your mouth so that others can see there is no hesitation or doubt. Remind yourself that they'll respect you more for being so definite.
Think through your fears about their possible reactions. Be rational about them. Don't let the fear of what they might think of you force you to do something you don't want to do.
Use a clear, assertive style: no ifs and buts, no excuses, no apologising. Thank the person for considering you for the request; say you are flattered and honoured.
And don't feel as though you have to find solutions to their problem; don't dwell on it afterwards or feel responsible for their problem.
Reclaim the time that's rightfully yours.
I would feel that there's a problem if the first word that comes out is no. Reason is that once you say No, your brain has already shutdown. You have stopped thinking of a solution, and I think this will retard your own growth.
Instead, the first thing you should do should be to think through the problem and see if its worth saying Yes. Not all things are worth saying Yes.
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