make sth up as you go along

Richard Vaughan in his book 100 Lecciones Grammaticales published by Richard Brown and David Waddell introduces some phrasal verbs at page 36. One draw special attention to me:

"I'm making up this story as I go along" which means in Spanish "Me estoy inventando esta historia sobre la marcha".

Compound phrasal verbs

Now, we have to be very careful with this expression. As Vaughan highlights, these are two phrasal verbs:

1. to make sth up
2. to go along

Taken each as an individual their meaning is a little bit different.

to make sth up

The Oxford Learners Dictionary defines this phrasal verb with: (1) constitute, (2) transform, (3) compensate and (4) find agreement or make peace.

go along

Oxford Dictionaries Online has three definitions for this expression: (1) to accompany, (2) to proceed or (3) to cooperate with somebody.

The MacMillan Dictionary of American English gives this expression as slightly different meaning. Besides the sense of accompanying sombebody it also means to continue.

Wikipedia mentions only the meanings of "to participate, cooperate or coform". 

The meaning of conforming or agreement is emphasized by the preposition with: to go along with sb.

The Oxford Dictionary knows also another expression when making the back translation from the Spanish "sobre la marcha" into English: to pay it by ear.

make sth up as you go along

The Cambridge Dictionaries Online defines this expression as "to invent a story or a tune without having though before about how it will end".

According to the online Thesaurus this expression means to improvise. Another expression with the same meaning would be to think on one's feet, which is also recognized by the Oxford Dictionary.

President Obama is using this expression in an article. Rep. Alcee Hastings uses this expression, watch here...

Eric Reiss defends it in his article as a principle of action.

Marie Wilson is using these word in one of her songs.

Clichés

According to Oxford Dictionaries chlichés are:

"Clichés are part of our everyday speech - we often don't realize that we're using them. They also occur especially frequently in certain types of writing (such as journalism) or areas of activity (such as sport, business, or politics), as demonstrated by the two examples above".

Even though they are frequent for some register like journalism, sport, business, politics and action films they should rather be avoided.

Alternatives

As we go along or as we go is good phrasal verb that can be translated into Spanish as "sobre la marcha", but has not always this meaning. 

As already mentioned there are good alternatives to the phrasal expression which have not all exactly the same decision.

1. We can use the concise verb: to invent by improvising
2. to think on one's feet; to invent by improvising
3. to pay it by ear, to decide spontaneously 
4. in the course of; while

Phrasal verbs

More on grammar issues related to phrasal verbs can be found on this Wikipedia site here...