You can also select particular types of files to save to the external instead of the entire downloads. Obviously the ones that take up the most space. You have the choice between Documents, Music, Video & Programs. Go to LW's menu bar, Tools>Options>Saving & click on one of the file types & press browse button & you can select another location to save it such as your external drive. See sample below.
(If you do choose separate locations for types of downlds, then you'll need to select those specific sub-folders when Using Library Explore button to access downld folder, instead of choosing the Saved Files folder.) 