That's not a final saddle--the sharp edges would eventually cause the strings to break, among many things. In this shot I'm deepening the bone nut slots for the strings--the depth must be approached slowly, as now you're affecting the string action and playability. It's best to get close, and plan on coming back later:
In all honesty I'm learning as I go. There's plenty of good reference material on the web about how to measure this, and you're unlikely to do any damage unless you make radical adjustments.
Once I felt that I had a suitable bow in the neck, I went to work trying to bring the strings down at the nut as low as I was comfortable with.
It's still a little high above the first fret, but certainly playable. I had the advantage of having had my Martin D-28 professionally set up, so I used feeler gauges to check various tolerances, and then decided to come close to them, but not all the way...
I've probably lowered the nut slots several times now. It's getting really close, and I'm going to take more of fin a bout 1 month after all the wood has stretched and settled, but its close. I think my low "E" has about .022" between it and the 1st fret--my Martin D-28 is at .008" !!! and it doesn't buzz!!! Not going there....
By the way, once I had the nut slots comfortably low, I took the nut of and removed quite a bit of material from the top--just until the top pf the nut allowed for the string top to be flush once seated. I also sloped the top and slots back toward the headstock a bit to help with the string angle change as they feed into the tuning machines. I sanded the bone nut from 220grit up through 12,000 micro mesh of something ridiculous like that, and it yielded a very nice glassy finish. They say to glue you nut in place in the end--mine fits very snuggly, and I like having the option to remove it later so I did not glue mine.
Next: making the saddle.
With the truss rod action fairly well adjusted, and the nut slots pretty low, the last element requiring attention would be the saddle. The beauty about the nut and the saddle is that although they are absolutely critical elements in the set up of the guitar, they are wholly independent from its construction, and you can ruin as many as you need without ever ruining your instrument. The same cannot be said for such things as cutting a sound hole, binding, etc. so there really is no cause for worry here.
The saddle effectively sets two things--the final string height and the intonation. Height is obvious--there are great resources for how to check this. Intonation is different. Each string's final length is slightly different from one another. The fine tuning of this is accomplished by subtle adjustment to the exact contact point between the string and the saddle. Typically, the "b" string should be longer than the rest, and each string has it's own ideal length so that when you fret notes up and down the fingerboard, the same note played on different strings will be exactly in tune. There's a method by which you string your guitar to pitch (assuming the action is relatively set) and place a small piece of high "b" or "e" string under the contact node for a specific string--you can then move this forward or backward over the top of the nut until the intonation is correct--then draw a pencil line. I tried this and pretty much found that I achieved the same results as if I had simply followed the contours inherent to every "compensated" saddle available for sale. Here's what my rough line looked like:
It's very easy to gently form a saddle using a Dremel and a little sanding drum. Then I polished it with Micro Mesh just like the nut.
FYI: I ran into some critical problems with my first saddle. The saddle slot I had chiseled was of a very inconsistent depth and more notably, width. I could NOT make a saddle that fit snuggly enough to not tip forward under string tension. I tried 2 saddles before concluding that I would have to route a bigger and more perfect slot WHILE THE BRIDGE WAS IN PLACE in order to remedy the situation. Sigh....
Lutherie is fun and challenging because it also involves problem solving and risk. I decided to make up a stupid looking jig that I bolted through the bridge pin holes that would a) give my router base something flat to move on, and b) have a straight edge that I could precisely align with my already cut saddle slot. I had to nail this cut, because it could only remove 1/64" of an inch from each inside edge of the slot I already had. I had to bolt this jig to the guitar because I couldn't very well have a jig moving and a guitar moving as I was routing.
It looks pretty hack, but every cut and position of that thing is precisely where it ought to be. That rout was one of the most nerve wracking things I had done to the guitar (failure= bridge removal) but unbelievably, it turned out perfectly! Now I had a perfect saddle slot to work with, and my 3rd saddle fit like a glove--the tone of my guitar actually improved when I fitted the better saddle. Finally, I made up a little label and affixed it with white glue onto the back on the inside of the body (covered up a small mistake/scratch with it!).
IT'S DONE! Well almost. It takes about a month or so for the action to settle, so in about as much time I'll come back and re-attack the nut and saddle, striving for a more perfect action setting. But it's extremely playable now...I'm just applying several coats of linseed oil to the neck until I think it's done...