It sounds as though you are trying to save a template, not a document based on a template. If your "document" name ends in .dotx or .dotm, rather than .docx or .docm, that's what you have. When you double-click on a template, rather than using "open", a new document based on it will open, called Doc1, Doc2, etc., which you may then name as you choose.

Does this help?