Your guest list is one of the the most important (if not the most important) aspect in planning your wedding day. Your guest list affects everything from your budget and venue, to your rentals and favors. It's not necessary to invite everyone you know from work, your entire high school cheer squad from 12 years ago, all of your parent's church friends, or that cousin four times removed that lives in Sweden now.
Basically, start with the people whose relationships you value now and will value in the future. "Would you have this person over to your house for dinner?" is a question I often ask my couples. If you have to, make an A list for the non-negotiable folks that you must have there, and a B list for the folks that if the budget allows you would also love to attend. Once you think you've finalized this list you should probably go back over it again just to be sure. :) Once you have your list and an overall headcount, then you will know exactly what size venue you will require, how many people you will need to feed, and how all of that affects your budget.
Quick note: As a general rule you do not send a Save the Date to someone that you do not intend to send a formal invitation to. You can always withhold a Save the Date and send the invitation later as needed.