Definition: AWS service for setting custom cost and usage budgets with automatic alerts when spending approaches or exceeds defined thresholds.
— Source: NERVICO, Product Development Consultancy
What Is AWS Budgets
AWS Budgets is a service that enables setting custom budgets to control costs and resource usage in AWS. It provides automatic alerts via email or SNS when actual or forecasted spending exceeds defined thresholds, allowing teams to react before costs spiral out of control.
How It Works
Users create budgets by defining a maximum monthly, quarterly, or annual amount, and configure alert thresholds at budget percentages (for example, at 80% and 100%). AWS Budgets continuously compares actual spending against these limits and sends notifications when they are reached. It can also execute automatic actions such as restricting provisioning of new resources through IAM policies when a critical threshold is exceeded.
Key Use Cases
- Cost control per project or environment (development, staging, production) with early warnings
- Spending governance in multi-account organizations with budgets per account or organizational unit
- Automation of provisioning restrictions when spending exceeds predefined limits
- Tracking reserved instance and Savings Plans utilization to maximize their value
Advantages and Considerations
AWS Budgets is an essential tool for any FinOps strategy, offering proactive control over cloud spending. The first two budgets are free, and additional ones have minimal cost. The main limitation is that automatic actions have inherent latency and do not prevent spending in real time, but rather act after detecting threshold breaches.