Managing AWS costs is crucial to avoiding unexpected charges. AWS Budgets is a powerful tool that helps you monitor spending, track usage, and receive alerts when costs approach or exceed your defined limits.
This guide will walk you through creating a budget quickly and effectively.
What Are AWS budgets?
AWS budgets let you:
- Monitor your spending in real time.
- Set limits based on costs or usage.
- Receive alerts when your budget thresholds are reached.
They’re an essential tool for staying in control of your AWS expenses, whether for personal projects, teams, or enterprise environments.
Root User or IAM User: Which Should You Use for Budgets?
- Root User:
- The root account has unrestricted access to all AWS resources and settings.
- Use the root account only for initial administrative tasks, such as enabling billing access for IAM users.
- Avoid using the root account for everyday budget management to minimize risk.
- IAM User:
- Recommended for creating and managing AWS Budgets.
- Provides enhanced security by allowing fine-grained permissions.
- Offers accountability, as all actions by IAM users are logged for auditing.
👉 Conclusion: Use the Root User only to enable billing access for IAM users. After that, manage AWS Budgets through an IAM User with appropriate permissions.
🔗 Learn more about IAM Users & Cloud Security through this hands on project
How to grant an IAM User permission to access billing
By default, IAM users cannot access the AWS Billing and Cost Management Dashboard. Here’s how to enable billing access:
- Log in as the Root User:
- Go to the AWS Management Console and log in with your root account credentials.
- Enable IAM Billing Access:
- In the top-right corner, click your account name and select Account.
- Scroll down to the section IAM User and Role Access to Billing Information.
- Click Edit, then check the box to enable billing access for IAM users.
- Save your changes.
Now the IAM user can access the Billing Dashboard and create budgets.
How to create an AWS budget
Step 1: Access AWS budgets
- Log in to the AWS Management Console with your IAM user.
- Click on your Account name in the top right and head to Billing and Cost Management home.
- In the left-hand menu, click Budgets and then select Create a Budget.
Step 2: Which budget types can be created?
AWS supports three types of budgets:
- Cost budget: Tracks spending against a fixed dollar amount (e.g., $10/month).
- Usage budget: Monitors usage metrics like GB stored or EC2 instance hours used.
- Savings Plan or RI budget: Measures savings from Reserved Instances or Savings Plans.
- Reservation utilization budget: Monitors the percentage of reserved instances or other reserved resources that you're using, helping identify unused capacity.
For this guide:
- Leave Use a template (simplified) selected.
- Choose Cost Budget and click Next.
🔗 Learn more about budget types here
Step 3: Define budget details
- Name your budget: Use a descriptive name, like “Monthly Budget for AWS”
- Set budget period: Choose a time frame, such as monthly, quarterly, or yearly. Monthly is the most common option.
- Enter budget amount: Specify the maximum amount you’re willing to spend. For example, $10.
- Scope your budget:
- To focus on specific services or regions, select Customize and follow the prompts.
- Otherwise, leave the default settings to track all AWS costs.
- Set notifications:
- By default, you’ll be notified at 85% and 100% of your actual spend and when your forecasted spend is expected to reach 100%.
- For custom thresholds (e.g., 80%), select Customize
Step 4: Configure alerts
- Add notification emails: Enter email addresses for individuals or teams who should receive alerts.
- Optional – Use SNS for automation: If desired, integrate alerts with AWS SNS to automate actions, like stopping services that exceed your budget.
Step 5: Review and create
- Review your budget settings, including thresholds and recipients.
- Click Create Budget to finalize.
Bonus: Create a zero spend budget
To ensure you don’t exceed AWS free tier limits:
- Create a new Cost Budget with a $0 limit.
- Set a 100% threshold alert.
- Add notification recipients, such as your email.
This budget will notify you if you exceed the Free Tier and start incurring charges.
Monitor and manage your budgets
- Access Budget Reports: Set up daily, weekly, or monthly reports to track spending trends. Remember, each report costs $0.01 USD per notification cycle.
- Investigate Unexpected Charges: Use the Billing Dashboard to view detailed bills and identify services or regions causing costs.
- Regularly Update Budgets: Adjust limits and thresholds based on changes in your usage or team needs.
Want Hands-On Practice?
If you’re looking to gain practical experience with AWS and stand out to recruiters, start working on hands-on projects to:
- Experiment with services within AWS that are used in the industry.
- Generate automated documentation to share with recruiters.
- Gain valuable experience that’s useful for certifications or job roles.
Conclusion
AWS Budgets is a simple yet effective way to monitor costs and avoid overspending. By using an IAM user with billing permissions, setting budgets, and configuring alerts, you can manage your AWS expenses securely and proactively.
And most importantly, once AWS sends you an email - don’t ignore it or you may be charged! A quick action today can save you from unexpected charges tomorrow. Stay proactive, stay informed, and you’ll never have to deal with surprise bills again.
