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The ultimate guide to cost management in AWS: 20 Detailed and effective strategies

This article is also available in Spanish.

If you're using AWS, you've likely faced the challenge of managing costs on this robust and flexible platform. AWS offers countless services, but without proper management, costs can quickly spiral out of control. Here are 20 detailed strategies to help you optimize your account and significantly reduce expenses.


1. AWS Cost Explorer and AWS Budgets

These are your first allies in cost management:

  • AWS Cost Explorer: Displays charts and trends of your expenses by service, region, and more. You can filter data to spot unusual spending patterns.
  • AWS Budgets: Set up alerts for total or specific expenses, such as EC2 or S3 usage. Customize alerts for each team or project.
  • New Feature: Integrate with Amazon QuickSight to visualize complex cost data in personalized dashboards.

👉 Learn how to use them: "Keep Costs Under Control with Cost Explorer and AWS Budgets."


2. AWS Compute Optimizer

Compute Optimizer automatically analyzes your EC2 instances, EBS volumes, ECS tasks, and Lambda functions to provide recommendations.

  • Use Cases:
    • Switch to smaller or lower-cost instances without losing performance.
    • Reduce Lambda execution time by adjusting memory size.
    • Optimize configurations for underutilized EBS volumes.

👉 Activate it in the AWS Console and review suggestions directly in the Compute Optimizer dashboard.


3. AWS Trusted Advisor

This service reviews five key areas: cost, performance, security, service limits, and fault tolerance.

  • New Feature: Now includes redundancy analysis to check if you can consolidate or eliminate resources.
  • Practical Use:
    • Enable basic checks (free) or consider advanced checks with Enterprise Support for detailed alerts.

4. Tags and organizational policies

Efficient use of tags and policies in AWS Organizations is essential for tracking costs.

  • Best Practices:
    • Tag by environment (production, development).
    • Include tags for resource owner and project purpose.
    • Apply spending policies for specific teams or accounts.

👉 Learn more: "Tags and Policies with AWS Organizations."


5. Turn off resources outside business hours

Automate shutting down resources like EC2, RDS, or Lightsail instances outside working hours using AWS Lambda and EventBridge.

  • Additional Option: Use AWS Instance Scheduler, a prebuilt solution that simplifies this task.

👉 Guide: "Automate Resource Shutdown with Lambda."


6. Savings Plans

Savings Plans offer discounts on services like EC2, Fargate, and Lambda in exchange for a monthly spend commitment.

  • Available Types:
    • Compute Savings Plans: Apply to any region, instance type, or eligible service.
    • EC2 Instance Savings Plans: Higher discounts but more restrictive (specific to instances).

👉 More details: AWS Savings Plans.


7. Reserved Instances

Reserving capacity for EC2, RDS, ElastiCache, or Redshift for 1 or 3 years can save up to 75%.

  • Practical Tip: Use AWS Cost Explorer reports to identify usage patterns before reserving.

8. Spot Instances

Ideal for flexible tasks like testing, data processing, or distributed applications.

  • New Feature: Consider "Spot Fleet," which combines multiple Spot instances for reliability.
  • Additional Use: Use Elastic Kubernetes Service (EKS) with Spot instances to orchestrate containers at low cost.

9. Upgrade to the latest instance generations

Always check for new instance generations, which typically offer better performance and lower prices.

  • Automation: Use AWS Systems Manager to identify older instances and plan upgrades.

10. Choose the right S3 storage class

Optimize costs by selecting the correct storage tier:

  • S3 Intelligent-Tiering: Automatically moves objects between storage classes based on usage.
  • S3 One Zone-IA: Saves costs for infrequently accessed data stored in a single zone.

11. Auto Scaling

Auto Scaling automatically adjusts resources based on demand.

  • Advanced Use:
    • Combine Auto Scaling with Spot instances for a cost-effective and scalable solution.
    • Use Elastic Load Balancer (ELB) to efficiently distribute traffic.

12. Performance insights in RDS

Turn off Performance Insights for test databases or use the free configuration if advanced analysis is unnecessary.

  • Alternative: Use CloudWatch Metrics for basic monitoring at no extra cost.

13. DynamoDB vs. RDS

Choose DynamoDB for lightweight projects or massive scalability needs, and RDS for complex relational applications.

  • Extra: Use DynamoDB On-Demand for unpredictable workloads to reduce costs.

14. Delete unused EBS Volumes

Detached EBS volumes still incur costs.

  • Additional Tip: Use Amazon Data Lifecycle Manager to automate backups and delete old volumes.

15. Choose a cost-effective region

Service costs like EC2, S3, or DynamoDB vary by region.

  • Extra Tip: Use CloudFront to reduce latency without needing resources in expensive regions.

16. Use private IP addresses

Reduce internal data transfer costs by using private IPs within the same availability zone (AZ).


17. CloudFront

CloudFront caches content to reduce costs and enhance user experience.

  • Extra: Configure expiration policies and compression to further optimize bandwidth usage.

18. Get AWS Credits

There are multiple ways to access credits:

  • Participate in AWS-hosted hackathons.
  • Request educational credits if enrolled in technical training programs.

19. Serverless-First mindset

Adopt serverless services like Lambda, DynamoDB, API Gateway, and Step Functions whenever possible.

  • Extra Tip: Use AWS Amplify for front-end projects that quickly integrate serverless solutions.

20. Monitor and optimize constantly

Set up CloudWatch Dashboards and use tools like AWS Cost Anomaly Detection to identify unusual spending patterns in real time.

More on AWS cost management here.

Tutorial on cost control in AWS here.


Conclusion

Controlling costs in AWS requires planning, monitoring, and constant adjustments. With these 20 strategies, you'll not only optimize your account but also maximize the value you get from AWS.

Do you have another cost-saving strategy? Share it in the comments! 🚀

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