Good Way
 
1. For fist-size holes or bigger, cut a square piece of Sheetrock slightly larger than the hole. Enlarge the hole so this patch will fit by placing the piece over the hole, tracing its outline, and cutting the wall along your marks with a utility knife.
 
2. Cut two pieces of small scrap wood a few inches longer than the width of the hole — these will be the backing for the patch. Put one piece of wood in the hole, hooking it with your fingers to hold it flat against the back of the existing wall. The wood will span the hole, parallel to and about an inch from its edge. With drywall screws, screw each end through the drywall into the wood. Repeat with the other wood scrap at the opposite edge of the hole.
 
3. Now lay the Sheetrock patch in the opening and screw it to the wood. Cover the seams with mesh dry-wall tape. Apply a first coat of joint compound (like Spackle) with a putty knife over the mesh. For a smooth finish, apply thin, wide coats, not one thick layer. Let dry overnight. Apply two more coats, and let each dry overnight, sanding smooth between applications. Sponge away dust, and paint to match the wall.