The best place to start when building your setup is to first understand what it is that you are trying to accomplish. The basic idea is that you are trying to get low enough in order to comfortably reach the ball, create natural space for your arms to swing, and to have balance. If you get any of those wrong, you are setting yourself up in a way that makes swinging a golf club very difficult.

As I have already alluded to, you will have a very difficult time grounding your club behind the ball if you are standing straight up and down. The first and most important step in building your setup is to bend from your hips. To get into the correct position, start by standing straight up and down and fully relax your arms. While standing straight up and down, you should notice that your arms naturally hang to your sides. Now, if you bend from your hips and continue to relax your arms you should notice that your arms are now hanging in front of you with enough space to swing. You do not lift your arms away from your body to create this space, your arms will hang directly under your shoulders. This accomplishes two extremely important components of a good setup; you get yourself lower to the ground and you have created natural space for your arms to swing.

The next step is a slight knee bend. The knee bend is to serve the purpose of getting slightly lower to the ground but also to get your legs engaged. You do not want to get down to the ball entirely with your knees. When you are trying to get into the right position, start with the hip bend, then get the slight knee bend.

Below is an example of a good setup. Notice that the arms and hands are hanging directly under the shoulders. The back has its natural curve which is very minimal and almost straight. Also notice a very slight knee bend. 

If you have followed the steps so far, you are really close to the correct setup, but there are still two more very important steps. When you take your grip, your right hand (for RH golfer) has to go on the grip lower than the left hand. As a result, you have to get your body in a position to naturally allow for this. In the video I explain a great way to do this but you need to tilt your shoulders where your right shoulder goes lower than your left (for right handed golfer). Keep in mind, you are changing the relationship of your shoulders by tilting your spine, not by individually lifting your left shoulder.

The final checkpoint is to check your balance. The easiest way to explain what I mean by balance would be to again start by standing straight up and down on a flat surface. Pay attention to what your feet feel on the ground. What you should notice is that your weight is distributed evenly between your left and right foot. You should also notice that you don't feel any extra pressure in your heels or toes and the weight should be evenly distributed.  Once you have that feeling, build your setup following the steps above, and just make sure that you feel balance in your feet the same way you do when you are standing upright. 

Below is an example the most common poor setup that I see. Almost all of the bend down to the ball has been created with the knees and the spine angle is almost vertical. This almost always goes together with the arms being lifted away from the body to create space. This makes it very difficult to use the shoulders properly. It is also very unstable because of the excessive knee bend. 

This is an example of what is called a c-curve posture. If you can imagine where the belt buckle would be pointing here it would almost be parallel to the ground or in other words, there is practically no bend from the hips.  Almost all of the adjustment down to the ball is coming from the back. This doesn't allow any shoulder rotation or a natural hip rotation.

This next example would be too much bend from the hips and standing too close to the ball. This is less common but notice how the arms aren't hanging directly under the shoulders. This can lead to a wide array of issues but most notably it makes it extremely difficult to properly start the backswing since the right leg is in the way. 

Give this a try and you will be on your way to better golf!