Managing AWS Costs with AWS Budgets and Credits

Cloud services such as Amazon Web Services (AWS) are now widely acknowledged as essential for businesses of all sizes. Nevertheless, the convenience and adaptability offered by AWS also present potential challenges when it comes to effectively managing expenses. Managing AWS costs can be quite intimidating, especially when dealing with a multitude of resources within your account. However, there is a strategy to address this concern by using AWS Budgets and Credits to handle your AWS expenditure. This approach offers a robust solution for maintaining control over cloud spending.

This article will delve into the process of configuring AWS Budgets, enabling you to establish customized cost and usage budgets, receive alerts when those thresholds are exceeded, and leverage the AWS Cost Explorer report for tracking and monitoring expenses.

Setting up AWS Budget

Using AWS Budgets, you have the capability to oversee your expenditures by defining spending limits and getting notifications when costs exceed the thresholds you've set. This tool grants you granular control over your budget management, allowing you to create budgets according to various cost and usage metrics, including total expenses, usage volumes, and individual services along with their associated expenses.

To initiate the setup of your AWS Budget, follow the outlined steps below:

Step 1: Sign in to the AWS Management Console . Ensure that you have the necessary permissions to create and manage budgets.

Step 2: Once logged in to the AWS Management Console, search for AWS Budgets in the services search bar. Click the Home on the left panel of the screen to navigate the AWS Budgets dashboard.

Step 3: In the AWS Budgets dashboard, navigate to the Budgets under Cost Management on the left-hand panel. Click Create Budget button to create a new budget.

Step 4: In setting up the budget, AWS offers two types of budgets: Use a template and Customize. It also has four budget types: Cost budget, Usage budget, RI (Reserved Instance) utilization budget, and Savings Plans utilization budget. Choose the budget type that aligns with your specific monitoring requirements.

Step 5: Provide essential details for the budget, including Budget Name, Budget Amount, in which you can put the spending limit you want to set for the selected budget type, Period which includes the timeframe (monthly, quarterly, or custom) of the budget, Start and End Dates that define the budget’s start and end date, and? Notification Preferences which set up email or SMS notifications to receive budget alerts (optional).

Step 6: For more refined budget monitoring, you can create multiple threshold levels based on different percentages of your budget amount. This allows you to receive alerts at various stages of budget consumption.

Step 7: Carefully review all the budget details you have provided. Once satisfied, click the Create Budget button to create your AWS Budget.

AWS Cost Explorer in Cost Management

AWS Cost Explorer is another AWS service that can aid you in effectively managing your AWS expenses. This robust tool allows you to swiftly analyze your AWS expenditures and usage patterns across various timeframes. It offers customizable reports, charts, and filtering features that enable you to gain insights into your spending across various AWS services, geographical regions, or time periods. Nevertheless, it's essential to be aware that the default report encompasses all expenses, including credits, which at times can obscure your actual costs. AWS Credits, or credits provided by AWS, are discounts extended to customers who are startups, actively engaged in their respective fields, members of the AWS Community Builders program, or individuals who have applied for AWS Activate credits. These AWS Credits play a pivotal role in reducing your overall cloud expenses. To exclude "Credit" entries from your AWS Cost Explorer report, you can follow these straightforward steps:

Step 1: Navigate to the Cost Management section. Select Cost Explorer to access the report.

Step 2: On the Reports dashboard, click Create a new Report to customize the report.

Step 3: Navigate to the right-hand panel of the screen, where you can see the Filters section. Modify the fields according to your report’s requirements.

Step 4: Select Charge Type from the list of available filters within the Modify filters window. Specify Credit to exclude it from the Cost Explorer report. This ensures that any cost associated with AWS Credits will not be considered in the report’s data.

Step 5: Click Apply to activate the filter and update the Cost Explorer report.

Final Remarks

Effectively managing AWS costs is essential for any company or business seeking to optimize its cloud investments. AWS Budgets and Cost Explorer are powerful tools that can help organizations achieve this objective. AWS Budgets enables companies to establish customized cost and usage thresholds, ensuring that they receive timely notifications when their actual spending nears or surpasses these predefined limits. This proactive approach enhances financial control and prevents unexpected expenses.

Moreover, AWS Cost Explorer offers comprehensive insights into AWS expenditures and usage, aiding businesses in identifying cost influencers and opportunities for cost optimization. By excluding "Credit" entries from the Cost Explorer report, organizations can attain precise financial transparency, enabling them to make well-informed decisions regarding their cloud expenses without the influence of discounts or promotional credits.

Collaboration among teams and regular reviews of spending trends are essential for ongoing cost improvement and more effective resource allocation. Consequently, these tools empower businesses to enhance financial efficiency and extract the maximum value from their cloud services.

* This newsletter was sourced from this Tutorials Dojo article.