Deciding who to invite and how many to invite are major decisions that will impact much of your wedding planning effort.  But before that decision of who and how many is made, you must do some serious thinking.  You and your finance need to consider what kind of wedding you want.

Have you dreamt of a huge wedding with nearly everyone you know in attendance or do you prefer a more intimate gathering of your closest family and friends?  What is your budget?  Does that mean that you have a few guests for an elegant sit down dinner or a big gathering at a buffet?  Once you have a handle on the likely size of the wedding, you can begin to gather guest names.

There are a few traditional ways to assemble the guest list.  The simplest is to divide between the bride's family and the groom's family - 1/2 each.  Or you can divide the list in thirds - 1/3 to the couple, 1/3 to the bride's family or 1/3 to the groom's family.  Remember to be flexible and try not to hurt anyone's feelings.  Know that there is some flexibility in the numbers.  Most wedding planners would suggest that as many as 20% of those invited will be unable to attend for a variety of reasons.  This can vary by time of year and area of the country, but it is a good general rule to keep in the back of your mind.

When you are assembling your lists, keep in mind that not only the names on the lists get invitations, but also the groom's immediate family, the wedding officiant, all members of the bridal party as well as their spouses or dates.

Once the potential list is assembled from all parties, you may find that some cuts will have to be made.
Deciding whom to cut or how many to cut is tough.  Maybe everyone has to cut a set number from their list.  Or the person with the longest list should make the cuts.  Or you can set criteria for certain categories of people like business associates or casual acquaintances or friends you haven't seen for years.  Maybe some of the names submitted are not likely to attend and would be better served by an announcement.  Maybe the wedding should not/could not include children.  Leave the parents on the guest list but omit the children's names when the invitation is addressed.  Whatever method is chosen, try to be fair and equitable.