Design Cost Optimized Architectures · Topic 5 of 5
Cost Visibility and Governance
Track and control AWS spend with Cost Explorer, Budgets, cost allocation tags, the Cost and Usage Report, Trusted Advisor and Compute Optimizer.
- 4 min
- Cost Explorer visualizes and forecasts spend and recommends Savings Plans and Reserved Instances.
- The Cost and Usage Report is the most detailed data, stored in S3 and analyzed with Athena.
- AWS Budgets alerts on cost or usage thresholds, and can run actions.
What it is
You cannot reduce cost you cannot see. Cost governance means measuring spend, assigning it to teams or projects, setting limits and alerts, and acting on recommendations.
This page supports all four cost topics. It covers the tools the exam names when a scenario says "find out why costs rose", "alert when spend passes a limit" or "charge costs back to each team".
How it works
Seeing and analyzing cost
| Tool | What it does |
|---|---|
| AWS Cost Explorer | Charts of past spend and forecasts, filtered by service, account, tag or Region, with recommendations for Savings Plans and Reserved Instances |
| AWS Cost and Usage Report (CUR) | The most detailed billing data, delivered to S3 and queried with tools such as Athena |
| AWS Cost Anomaly Detection | Uses machine learning to spot unusual spend and send alerts |
| AWS Pricing Calculator | Estimates the cost of a planned architecture before you build it |
| AWS Billing and Cost Management | The console area that holds invoices, payment settings and the cost tools |
Alerts and limits
AWS Budgets lets you set a cost or usage budget, and alerts you by email or Amazon SNS when actual or forecast spend crosses a threshold. Budgets can also run actions, such as applying a restrictive policy when a limit is reached. It can track Savings Plans and Reserved Instance coverage and utilization too.
Remember the difference. A budget warns or acts. It does not by itself stop services unless you configure an action that does so.
Allocation with tags
Cost allocation tags are labels, such as team or project, that you apply to resources. After you activate them in the billing console, they appear in Cost Explorer and the Cost and Usage Report so you can split spend by owner.
In AWS Organizations, tag policies help enforce consistent tag names. Using separate accounts for teams or environments is another clean way to separate cost, and consolidated billing then adds it up.
Consolidated billing
AWS Organizations combines the usage of all member accounts into one bill. Because usage is combined, volume pricing tiers can be reached sooner. Savings Plans and Reserved Instances can also be shared across accounts in the organization, so one account's unused commitment can benefit another.
Recommendations
- AWS Trusted Advisor checks the account against best practices, including a cost optimization category with items such as idle or underused resources. The full set of checks depends on your AWS Support plan.
- AWS Compute Optimizer recommends right sized EC2 instances, EBS volumes, Lambda functions and Auto Scaling groups from CloudWatch data.
- S3 Storage Lens and storage class analysis show how S3 data is used, and point to savings.
- AWS Cost Optimization Hub gathers savings recommendations in one place.
A simple cost review routine
- Tag resources and activate the tags.
- Look at Cost Explorer by service and by tag to find the top spenders.
- Check the recommendations for idle, oversized or unattached resources.
- Pick purchase options that fit steady usage.
- Set budgets and anomaly alerts to catch future surprises.
Where each earlier topic fits in
The tools on this page show you which of the four areas to start with.
- Storage: storage classes, lifecycle rules and snapshot clean up.
- Compute: purchase options and right sizing.
- Databases: capacity modes and engine choices.
- Network: endpoints, caching and keeping traffic local.
For a question about chargeback or showback by team, the answer includes cost allocation tags. For one about being warned before overspending, the answer is AWS Budgets.
What to remember for the exam
- Cost Explorer visualizes and forecasts spend and recommends Savings Plans and Reserved Instances.
- The Cost and Usage Report is the most detailed data, stored in S3 and analyzed with Athena.
- AWS Budgets alerts on cost or usage thresholds, and can run actions.
- Cost allocation tags must be activated before they appear in cost reports, so tag and activate early.
- Consolidated billing combines usage across accounts, and commitments can be shared.
- Trusted Advisor checks for idle and underused resources, and Compute Optimizer recommends right sizing.
- The Pricing Calculator estimates cost before deployment.
- Cost Anomaly Detection warns about unusual spend.
Common mistakes
Expecting Budgets to shut down resources by default. It alerts unless you add an action to respond.
Tagging without activating the tag for billing. An inactive cost allocation tag does not show in cost reports.
Using Pricing Calculator to analyze past bills. It is for estimates. Use Cost Explorer or the Cost and Usage Report for history.
Treating Trusted Advisor as the only source. Its recommendations are a starting point, and some need a higher support plan.
Activating a cost allocation tag takes effect going forward, so start tagging early and do not count on splitting older spend by a tag you activated late.
Check yourself
Which service sends an alert when forecast spend will pass a set amount?
AWS Budgets.
How can you see how much each project spends?
Apply cost allocation tags to resources, activate them in billing, and group costs by tag in Cost Explorer or the Cost and Usage Report.
Which tool gives the most detailed billing data for analysis in Athena?
The AWS Cost and Usage Report.
Topic 5 of 5 in Design Cost Optimized Architectures
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