Day 12 - Budgets and Anomaly Detection

AWS Cost Optimisation Advent Calendar 2024

3 min read time

#aws

Welcome to day 12 of the unofficial AWS Cost Optimisation Advent Calendar 2024, where every day we will be sharing new tips or tricks to help you optimise your cloud costs before Christmas 2024.

Today is about saving money by catching problems early, before you actually receive the bill.

The two most important tools for this are Budgets and Cost Anomaly Detection.

1. Budgets

Budgets are a way to set alerts on your AWS spending. The most common budget is a Monthly Cost budget that alerts you when you are forecasted to exceed a certain maximum amount in a month.

The alerts can be sent by email or SNS events.

You can set up budgets in the AWS Management Console under Cost Explorer, or using the AWS CLI.

Other common budgets you may want to set up are:

• Daily Cost Budgets
  • For when you exceed a certain daily cost
• Usage Type Budgets
  • When you exceed a certain amount of spend for a specific type of usage eg. External Data Transfer
• Savings Plan Budgets
  • When the percentage of your resources covered by Savings Plans drops below a certain threshold
• Reservation Budgets
  • When the percentage of your resources covered by Reserved Instances drops below a certain threshold

It is free to set up Budgets so there is no reason not to set them up and get an early warning if your costs are going to be higher than expected. If you set up alerting via SNS there is a minimal cost for the SNS messages.

2. Cost Anomaly Detection

Cost Anomaly Detection is a feature of AWS Cost Explorer that uses machine learning to detect unusual spending patterns in your account.

It learns from your past spending behaviour to detect when your spending is higher or lower than expected.

You can set up alerts for when an anomaly is detected in the same way as Budgets either by email or SNS.

How is this different from Budgets?

Whilst at the end of the day they are both serving a similar purpose, to alert you when your costs are going to be higher than expected, Anomaly Detection has a few more useful features.

Firstly, it will tell you why your costs are higher than expected and point you to the problem quickly.

It can also alert you prior to exceeding your target budget allowing you to catch the problem even earlier than when using just budgets.

Again there is no cost to use Cost Anomaly Detection, unless you get alerts via SNS, so these two tools should be used in conjunction to give you the best chance of catching problems early.

If you don't have these enabled yet, go and set them up now to enjoy the holiday season knowing there won't be any surprises on New Year's Day!

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