What is AWS Budgets?

How to Manage Your Costs with AWS Budgets 

AWS Budgets allows users to create different types of budgets, including:

• Cost Budgets: Set spending limits on AWS services.
• Usage Budgets: Define usage thresholds for AWS services.
• RI Utilization Budgets: Track underused or unused Reserved Instances (RIs).
• RI Coverage Budgets: Monitor RI coverage levels.
• Savings Plan Utilization Budgets: Ensure optimal use of Savings Plans.
• Savings Plan Coverage Budgets: Identify gaps in Savings Plan coverage.

Users can choose from three budget types:

• Fixed Budget: A static budget for all periods.
• Planned Budget: Variable budgets for different months or quarters.
• Auto-Adjusted Budget: Budget automatically adjusts based on past usage trends.

Best Practices for AWS Budgets

• Using Managed Policies: AWS provides IAM-managed policies to ensure budget actions run securely. The User policy lets users pass a role to AWS Budgets, while the Budgets policy allows AWS Budgets to execute actions. Using IAM-managed policies helps avoid manually updating permissions whenever AWS adds new features.
• Setting Budget Alerts: You can set up budget alerts to notify up to ten email addresses or link them to one Amazon SNS topic per alert. AWS Budgets supports actual and forecast-based alerts—actual alerts trigger once per period when a budget threshold is reached, while forecast alerts are sent whenever predicted spending exceeds or drops below your set limit. AWS needs about five weeks of usage data to generate forecasts.
• Controlling Access: To give IAM users permission to create budgets in AWS, they need access to billing information, Amazon SNS notifications, and CloudWatch alarms. These permissions help control who can configure and manage budgets within your organization.
• Programmatic Access: If you want to automate budget creation and management, you can use the AWS Budgets API. The best practice is to create a dedicated IAM user for programmatic access. If multiple users need access, you can set up IAM roles with query permissions to control who can retrieve budget data.

AWS Budgets vs AWS Cost Explorer

AWS Budgets and Cost Explorer serve different purposes in cloud cost management. AWS Budgets helps you set spending limits, track costs, and forecast future expenses, ensuring you stay within budget. It provides alerts and automated actions when costs approach or exceed thresholds. 
AWS Cost Explorer, on the other hand, is designed for cost analysis and optimization. It allows you to visualize past and current usage, analyze trends, and receive cost-saving recommendations based on historical data. While Budgets focuses on proactive cost control, Cost Explorer is more about understanding and optimizing cloud spend.

When to Use AWS Budgets?

Use AWS Budgets when you need strict cost control and spending alerts. It’s ideal for setting custom budget thresholds and receiving email or SNS notifications before you exceed them. Budgets can also forecast next month’s costs based on past usage, helping prevent unexpected expenses. With AWS Budgets Actions, you can automate responses to limit overspending, such as restricting resource provisioning or modifying permissions.

When to Use AWS Cost Explorer?

Cost Explorer is best for analyzing past AWS expenses, tracking usage patterns, and identifying cost-saving opportunities. It provides 13 months of historical data, allowing you to spot trends and predict future spending. Use Cost Explorer’s filters and groupings to break down expenses and understand where your AWS budget is going. It also offers recommendations for reducing unnecessary costs and allows you to set cost anomaly alerts to detect unexpected spikes in spending.

AWS Budgets FAQs

• Q1. How does AWS Budget work?
  AWS Budgets enables users to set cost and usage budgets, providing alerts when actual or forecasted spending exceeds limits. It also tracks RI and Savings Plan utilization and coverage.
• Q2. What filtering dimensions can be used to create a budget?
  AWS Budgets allows filtering by AWS Service, Availability Zone, Member Account, and other parameters.
• Q3. How many budgets can I create?
  Users can create up to 20,000 budgets. For higher limits, AWS Support can be contacted.
• Q4. How many alerts and subscribers can be added for each budget?
  Each budget allows up to five alerts, with each alert supporting up to 10 email recipients or an SNS topic.
• Q5. Is there a cost associated with AWS Budgets?
  Budgets without actions are free. AWS provides two free action-enabled budgets, with additional ones incurring costs.
• Q6. Can AWS Budgets take automatic actions based on spending thresholds?
  Yes, AWS Budgets Actions allow you to configure automatic responses when cost or usage thresholds are exceeded, such as restricting resource provisioning or modifying permissions.
• Q7. How far back can AWS Budgets track cost and usage data?
  AWS Budgets provides historical data from the past five months to help with cost forecasting.
• Q8. Can AWS Budgets forecast future costs?
  Yes, AWS Budgets can predict future spending based on the past five months of usage and cost data.
• Q9. What is the difference between actual and forecasted budget alerts?
  Actual alerts trigger once per budget period when a threshold is reached, while forecast-based alerts are sent when predicted spending is expected to exceed the set limit.
• Q10. Can I use AWS Budgets for Reserved Instances (RI) and Savings Plans?
  Yes, AWS Budgets helps track RI and Savings Plan utilization and coverage, ensuring you maximize cost savings.

Achieve superior AWS Cost Tracking and Budgeting with CloudKeeper Lens

CloudKeeper Lens complements AWS Budgets by providing advanced cost visibility, real-time insights, and automated optimization recommendations, making cloud cost management more effective. While AWS Budgets helps track cloud costs and sends alerts when spending exceeds limits, CloudKeeper Lens provides a far deeper level of cost visibility, analytics, and actionable insights to drive smarter cloud financial management. 
Learn more about CloudKeeper Lens.