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The first thing to realize is that guests make the wedding. Better to cut down on the menu - don't serve filet mignons, serve meatloaf if you have to. Cut down on the extravagance of the food and wines that are served but don't cut down on the people who deserve to be there.
Invite your truly great, old friends that you grew up with and invite your best college friends as well as those new friends you love and adore - get a sprinkling of all your favorites. Then explain to the people you've invited that you plan to have a small wedding so they don't expect to see every "Tom, Dick and Harry" there. Tell them to please keep quiet as you're very strictly limited on invitations and they'll understand. Realize you may end up hurting some feelings no matter what you do.
The one group you must take care of is family, family members and those who helped raise you - put them at the head of the list. Take care of family because family gets very touchy. If you leave out cousins, 2nd cousins, they just get furious. Even invite that cousin you've never gotten along with. Weddings should be a time to overlook family problems. You cannot leave out the "steps" and the "halves" from another marriage, you have to invite them all, so put them right up there on the front of the guest list. Weddings are supposed to be a time of joy and that starts by being inclusive.