AWS Budgets

What is AWS Budgets?

AWS Budgets enables teams to set custom cost, usage, RI/Savings Plan utilization, and coverage targets, receive alerts when thresholds are crossed, and even trigger automated actions. It is a proactive FinOps tool that complements Cost Explorer by providing budget monitoring and governance.

Budget types you can create

• Cost budgets – track total or unblended cost over time.
• Usage budgets – monitor resource usage (e.g. EC2 hours, S3 GB).
• RI utilization / coverage budgets – ensure Reserved Instances are being used as expected.
• Savings Plan utilization / coverage budgets – similar to RI budgets but for Savings Plans.

Budgets support filters by service, linked account, region/AZ, tags, API operation, purchase option, and more, enabling fine‑grained monitoring.

Alerts and actions

• Budgets can send email or SNS notifications when actual, forecasted, or usage values exceed thresholds (e.g. 80% and 100%).
• You can attach budget actions to a budget: when triggered the action can apply an IAM policy, stop/reduce EC2 instances via Systems Manager, or notify teams via AWS Chatbot, Chime, or Slack.
• Up to five alert thresholds are allowed per budget.

Budgets API/CLI supports up to 20,000 budgets per payer account and can be automated with your IaC pipelines.

Access and integration

• Accessible via the AWS Billing console or the standalone Budgets service page.
• IAM policies (and, in Organizations, Service Control Policies) control who can view or modify budgets.
• Integrates with Cost Explorer for drill‑down, AWS Chatbot for Slack alerts, Service Catalog for governance, and EventBridge for custom workflows.
• Budgets can be monthly, quarterly, or annual.

Use cases and examples

• Team chargeback – create cost budgets per linked account or tag and notify team leads when spend spikes unexpectedly.
• RI optimization – set a utilization budget and receive alerts if usage drops below 90%, prompting a review of unused reservations.
• Development sandbox control – assign a $100 monthly cost budget to a development account and add an action that triggers a Lambda to stop all EC2 instances when exceeded.

Example: create a cost budget via AWS CLI

aws budgets create-budget \
  --account-id 123456789012 \
  --budget '{"BudgetName":"DevCostBudget","BudgetLimit":{"Amount":"500","Unit":"USD"},"TimeUnit":"MONTHLY","BudgetType":"COST"}' \
  --notifications-with-subscribers '[{"Notification":{"NotificationType":"ACTUAL","ComparisonOperator":"GREATER_THAN","Threshold":80},"Subscribers":[{"SubscriptionType":"EMAIL","Address":"[email protected]"}]}]'

Best practices

• Define budgets early in project lifecycle and tie them to tags or accounts for visibility.
• Use forecasted threshold alerts to catch issues before month-end.
• Combine budgets with Cost Anomaly Detection and Guardrails (Service Catalog/CloudFormation) for robust cost governance.
• Regularly review and prune obsolete budgets to avoid noise.
• Encrypt budget data in transit and require MFA for budget creation via IAM policies.

Pricing note

• Budget creation and notification monitoring are free.
• Budgets with actions incur a small daily charge after the free tier (currently $0.10/day each). See the AWS Budgets pricing page for current rates.

Related Razorops articles

• AWS Cost Explorer
• AWS Cost & Usage Report (CUR) deep dive
• AWS Reserved Instance Reporting
• AWS Cost Anomaly Detection
• Top 50 AWS DevOps Interview Questions and Answers

Top 20 AWS Solutions Architect interview FAQs

1. Q: What is the difference between EC2 instance store and EBS? A: EBS is network-attached, persistent block storage; instance store is ephemeral and data is lost when the instance stops or terminates.

2. Q: How does Amazon S3 provide such high durability? A: S3 replicates objects across multiple Availability Zones and performs integrity checks, offering 11 9s durability.

3. Q: What is a VPC and why is it important? A: A Virtual Private Cloud isolates resources at the network level and provides subnets, routing, security groups, and private connectivity.

4. Q: Security groups vs NACLs—differences? A: Security groups are stateful and attached to instances; NACLs are stateless and applied at the subnet level.

5. Q: How would you design for high availability? A: Use multiple AZs, autoscaling groups, load balancers, and managed services (RDS Multi-AZ).

6. Q: When to use SQS vs SNS? A: SQS is for decoupled queue-based processing; SNS is for pub/sub notifications to multiple subscribers.

7. Q: What is cross-region replication (CRR) for S3? A: CRR asynchronously copies objects to another region for disaster recovery and compliance.

8. Q: How do you secure data in transit and at rest? A: Use TLS for transit and SSE-KMS/SSE-S3 or client-side encryption for data at rest; manage keys with KMS.

9. Q: What is an Auto Scaling group? A: ASG manages EC2 fleets, scales based on policies and metrics, and replaces unhealthy instances automatically.

10. Q: How does Route 53 routing policy work (simple, weighted, latency)? A: Simple returns a single resource; weighted distributes traffic by weight; latency routes to the lowest-latency region.

11. Q: When to use RDS Multi-AZ vs Read Replica? A: Multi-AZ for HA and failover; Read Replica for read scaling and reporting workloads.

12. Q: What is CloudFormation? A: Declarative IaC to provision AWS resources and track drift.

13. Q: How do you optimize costs in AWS? A: Rightsize, use spot/reserved/savings plans, lifecycle policies for storage, and monitor spend with Cost Explorer.

14. Q: Explain S3 consistency model. A: S3 provides strong read-after-write consistency for PUTs and overwrites across all regions.

15. Q: What are IAM best practices? A: Apply least privilege, use roles, enable MFA, rotate credentials, and leverage centralized identity providers.

16. Q: How do you design a data lake on AWS? A: Use S3 for storage, Glue Data Catalog for metadata, Lake Formation for access control, and Athena/EMR/SageMaker for processing.

17. Q: Differences between ALB and NLB? A: ALB is Layer 7 with routing features; NLB is Layer 4 optimized for throughput and static IPs.

18. Q: What is a VPC endpoint and when to use it? A: VPC endpoints provide private connectivity to AWS services without using the public internet.

19. Q: How would you perform disaster recovery in AWS? A: Choose a DR strategy (Backup & Restore, Pilot Light, Warm Standby, Multi-Site) based on RTO/RPO and automate failover.

20. Q: How do you monitor and troubleshoot AWS infrastructure? A: Use CloudWatch, CloudTrail, X-Ray, VPC Flow Logs, and third-party monitoring/APM tools.