AWS Budget Setup

AWS Budget Setup

Before diving into EC2, it is essential to set up AWS Budgets to protect yourself from unexpected charges. This is especially important when learning, as accidental resource usage can result in bills.

Why Set Up Budgets First?

When you start creating EC2 instances and other resources, costs can accumulate quickly if you forget to terminate them. AWS Budgets lets you set spending thresholds and receive alerts before costs spiral.

Creating a Zero-Spend Budget

Follow these steps to create a budget that alerts you when you spend anything:

1. Search for Billing and Cost Management in the console
2. Click Budgets in the left menu
3. Click Create budget
4. Select Use a template then Zero spend budget
5. Enter your email for notifications
6. Click Create budget

This budget will alert you the moment any charge appears on your account.

Creating a Monthly Cost Budget

For a more practical budget:

1. Click Create budget
2. Select Use a template then Monthly cost budget
3. Set your budget amount (e.g., $10)
4. Enter your email address
5. Click Create budget

Budget Alert Thresholds (default):
- 85% of budget reached — Warning email
- 100% of budget reached — Critical email
- Forecasted to exceed — Predictive alert

Using AWS Cost Explorer

Cost Explorer provides visual cost analysis:

1. Go to Billing and Cost Management
2. Click Cost Explorer
3. View spending by service, Region, or time period

Free Tier Usage Monitoring

Check your Free Tier usage regularly:

1. Go to Billing and Cost Management
2. Click Free Tier in the left menu
3. Review usage percentages for each service

Pro Tip: Set up both a zero-spend budget and a monthly budget. The zero-spend budget catches any unexpected charges immediately, while the monthly budget tracks your planned spending.

Key Takeaways

• Set up AWS Budgets before creating any resources
• A zero-spend budget alerts you immediately when charges appear
• Use Cost Explorer to visualize spending by service and time period
• Monitor Free Tier usage regularly to avoid exceeding limits
• Budget alerts are sent by email at configurable thresholds
• Always terminate unused resources after hands-on labs