Ah, the bar, which guests love and whoever is footing the bill hates. Without a doubt, the bar bill can quickly send your wedding budget over the edge if you're not careful. So how to avoid bankruptcy from the bar?
First and foremost. a Cash Bar is NOT an option. Throw that idea out of your mind and never let it return. Never, ever is it OK to ask your guests to pay for their own drinks. Remember that a wedding is a big party you are throwing. Would you ask guests in your home to cough up a few bucks for the beer you served them? Same applies to the wedding.
If your budget is really tight, serve beer, wine and sodas. Ask the hotel/restaurant to bill you for wine by the bottle, not the glass. If you can bring in your own wine, even better. Most hotels/restaurants will not let you bring in your own beer but doesn't hurt to ask.
Have a bit more in the budget? Consider serving a signature cocktail as well.
If serving a full bar (wine, beer, hard liquor), consider nixing the tequila, as it's usually done as a shot (and copious numbers of shots at that). Since a shot is the same price as a highball, the bill starts to snowball pretty quickly. If you are offering margaritas and don't want tequila shots served, make it clear to the bartenders. Very clear. And ask them to not relent, no matter how obnoxious guests may get about doing shots. It's your party and guests have to respect your decisions.
Another suggestion is to have a menu of what is being offered set up on the bar (ie matching your table number frames or maybe on a miniature chalkboard) so guests know exactly what they can have. And be sure that anything you're not offering has been removed from the bar.
Speak with your reception site to see what options they have for the bar. Some may allow you to bring in your own liquor (which is usually the cheapest route), others may have an open-bar price (but be sure to figure out if this is economical or not for your group). Another possibility is going by the bottle, rather than per drink. And, depending on your group and what you're offering, running a tab (consumption bar) may be the best, where you pay for what was consumed.
On average, people drink the most during the first two hours (cocktail hour), then usually slow down with just wine during dinner, picking up with other drinks afterwards.
Need help? evite has this handy-dandy drink calculator application so you can estimate how much your guests will consume. Genius!
Finally, reconsider the champagne for toasting. Most people don't like bubbly I've found and few will care if it's a Cava, sparkling wine or real French Champagne. Offer sparkling wine, as it's a fraction of the cost of the French nectars. Or forego it altogether and have people toast with whatever they're drinking.
Whatever route you choose, don't feel pressured to offer more than you feel your budget can handle. Guests should have options but they should also be gracious and accept whatever you're providing.