This is based on sounds, not on spelling, so night would be 21 not 261 because the g is not pronounced. xerox would be 0470.
The idea is that once you memorise the system, you can memorise long strings of numbers by converting chunks of 3-4 numbers into words and then making a funny, memorable story to go with the words. For example you could remember the first 16 digits of pi with “my turtle banjo lime love book palm” 3.141692653589793.
You can make up words on the fly with this system and that’s good practice, but ultimately what you want to do is decide on a set of words that will always mean certain numbers, for example 1 is always tea and never anything else and so if you want to remember the first thing on your list you ask yourself if you have any funny stories about tea. If 1 is sometimes tea and sometimes tie then you might make a funny story about tea and but then you go looking for a story about a tie and you don’t find anything.
It can be fun to try to count this way, trying to use the same words each time:
sea, tea, Noah, ma, ray, law, jaw, key, foe, paw,
daze, dad, den, dam, dare, dale, dash, deck, dive, dab,
NASA, net, nun, name, near, nail, nudge, neck, navy, nab,
mouse, mat, man, mama, mare, mail, mash, mac, mafia, map,
race, rat, ran, ram, rare, rail, rash, reck, reef, rap,
lace, lad, lane, lamb, lair, lily, lash, lake, love, lab,
chase, chat, chain, chime, chair, chill, cha-cha, check, chav, chap,
case, cat, can, cam, car, call, cash, cake, calf, cap
face, fat, fan, femme, fear, fail, fish, fake, fife, fab
base, bat, ban, bomb, boar, ball, bash, back, buff, baby
daisies…
Then if you have to remember a shopping list to buy potatoes, onions, mustard, marjoram, garlic, paprika, chill powder, salt, oil, you could tell yourself a story “The
potatoes
came alive and were swimming in
sea
and I steeped some
onion
peels in hot water to make a
tea
and
Noah
fed the animal some sweet Bavarian
mustard
and
ma
is growing
marjoram
in her garden, a
ray
of light shining on a single clove of
garlic
revealing the garlic to be the One True Seasoning that must be put into all the dishes and so the redheaded child smeared some
paprika
on his
jaw
to make it look like he was old enough to grow a beard and put
chili powder
on the
key
so that it would burn the fingers of whoever touched it and throwing
salt
in the eyes of your
foe
s to get them to leave you alone and putting fish
oil
on the constipated cat’s
paw
so it will lick it up.”
If you visualise it to yourself and try to make it as funny as possible you’ll be able to remember most of it, and then when you're at the shops you just run through the list like sea tea noah ma ray law jaw key foe paw and you’ll have it. But do it in your own language, it’s better.