AWS Solutions Simplified

Mastering AWS Cost Management: A Complete Guide

Harish Narnaware's photo
Harish Narnaware
·

5 min read

Overview

Managing cloud costs efficiently is crucial for businesses leveraging AWS. AWS provides a suite of cost management tools to help users control and optimize their cloud spending. This blog covers everything you need to know about AWS Cost Management.

Key Tools for AWS Cost Management

1. Cost explorer

2. Cost Explorer Saved Reports

3. Anomaly Detection

4. Budgets

5. Pricing Calculator

6. Savings Plan

7. Savings & Commitments

8. Billing Alerts

9. Credits

1. Cost Explorer: Your Spending Dashboard

AWS Cost Explorer offers detailed insights into your cloud spending, allowing you to make informed decisions

  • Usage Views: Analyze costs monthly, weekly, or hourly.

  • Date Range: Customize reports by selecting specific start and end dates.

  • Graph Options: Visualize data using various graph styles

  • You can choose date first and last date.

  • Change graph with this icons.

Filters for In-depth Analysis

You can refine your views using filters such as:

  • API Operation

  • Availability Zone (AZ)

  • Billing Entity

  • Charge Type

  • Instance Type

  • Linked Account

  • Platform

  • Region

  • Service

  • Tag

Key Insights

  • Discover which services drive the most costs.

  • Identify high-traffic Availability Zones.

  • Pinpoint the member account with the highest spending

  • Download cost usage breakdown in csv file.
  1. Cost Explorer Saved Reports

  • Click on create new report

  • You can see there are some predefined reports you can use.

  • Or else you can also create your self defined report.

  • Choose filter

  • And click on save to report library.

3. Anomaly Detection: Stay Alert to Cost Spikes

Configure AWS Cost Anomaly Detection so that it detects anomalies at a lower granularity and spend patterns, in context to your monitor type.

For example, your spend patterns for Amazon EC2 usage might be different from your AWS Lambda or Amazon S3 spend patterns. By segmenting spends by AWS services, AWS Cost Anomaly Detection can detect separate spend patterns that help decrease false positive alerts. You can also create cost monitors. They can evaluate specific cost allocation tags, member accounts within an organization (AWS Organizations), and cost categories based on your AWS account structure.

As you create your cost monitors, configure your alert subscriptions specific to each monitor.

4. Free Tier: Track Your Free Usage

The AWS Free Tier dashboard lets you monitor your usage effectively:

  • MTD Actual Usage: View your month-to-date usage.

  • MTD Forecast Usage: Predict your usage for the month based on current trends.

5. Budgets: Set Spending Limits

AWS Budgets help you stay within your financial goals

  • Choose a template, such as a monthly budget.

  • Set a name (e.g., Mont``hlyCost) and define the budget amount (e.g., $30).

Templates - monthly budget

You can choose a template according to your needs.

Enter your email for notifications

Budget amount in dollar - 30

Put your email - demo@domain.com

Create the budget and start monitoring.

You see budget is created.

6. Pricing Calculator: Estimate Costs Before You Spend

The AWS Pricing Calculator is a powerful tool to estimate cloud costs:

  • Getting Started:

    • Select a service and region (e.g., EC2 in US East).

    • Configure instance type, OS, and workload specifics.

    • Choose a pricing model (e.g., On-Demand or Reserved)

I have taked ec2

Location type - region

Choose a region - US east (N.virginia)
Search ec2

Select configure in ec2.

Give a description name - ec2budget

Choose i which type of instance tenancy - Shared instance

Operating system - linux

Workloads - constant usage

Number of instance - 1

Search t2.medium

Select t2.medium

Choose your payment options

Reservation plan - on demand

Usage - 100

Usage type - utilization per month

You can choose your preferable reservation plan.

You can configure other things as well.

Click on save and view summary.

Here you see its calculated estimated cost yearly and monthly.

You can share and export this cost estimate

That's how you can find other service cost as well.

8. Billing Alerts: Prevent Unexpected Charges

Go to Billing > Billing Preferences and enable invoice delivery and alerts

  1. Use CloudWatch to create alarms:

Search cloudwatch and click on it

Click on the alarm on the left hand side

  • Click on select metric.

Click on billing

  • Click on currency as USD

    Click on select.

  • Add email notifications using a topic (e.g., Default_Cloudwatch_Alarms_Topic).

Click on currency as USD

Click on select.

Change threshold value to 10.

Create new topic

Give a name of topic - Default_Cloudwatch_Alarms_Topic

Email endpoints - demo@domain.com

Put your email address wherever you want to take notification.

Click on next.

Give a name of this alarm

Name - Monthly aws cost

Click on next

Review it

And click on create alarm

You will see your alarm is created.

9. AWS Credits: Reduce Your Expenses

Use AWS Credits to offset costs:

Redeem Credits:

  • Navigate to Billing and Cost Management > Credits.

  • Enter promotional codes to add credits

    Track Usage:

    • Monitor redeemed credits in the dashboard

Add credits with promotion code.

After Redeem you will see your credits on Credits dashboard

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