Concepts
AWS Budgets allows you to set custom budgets to track your cost and usage from the simplest level to more complex use cases. You can define budgets for your overall costs or on a per-service basis, and even filter by tags for more granular control.
How to Set Up an AWS Budget:
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Go to the AWS Budgets Dashboard:
- Sign in to the AWS Management Console, and open the Billing and Cost Management Dashboard.
- Choose Budgets from the navigation pane.
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Create a Budget:
- Click on “Create budget” and choose the type of budget you’d like to set – Cost Budget, Usage Budget, or Reservation Budget.
- Enter the necessary details including the period (Monthly, Quarterly, Annually), budgeted amount, and any filters (such as services, accounts, tags, etc.)
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Set Alerts:
- You can set alerts based on actual or forecasted usage. For example, you might want an alert when your actual costs exceed 80% of your budget, or when forecasted costs estimate you will exceed 100% by the end of the period.
- Configure the alert threshold, and choose whether you want to receive alerts via email or integrate with Amazon Simple Notification Service (Amazon SNS) for more complex notification workflows.
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Review and Create:
- Once all details are set, review your budget configuration and create your budget.
Example Budget Scenario:
Suppose you want to set a monthly cost budget of $500 for your EC2 instances tagged with project:alpha.
- Type: Cost Budget
- Period: Monthly
- Amount: $500
- Filters: Service (EC2), Tag (project:alpha)
- Alerts: 80% actual ($400), 100% forecasted ($500)
- Notification: Email to sysadmin@example.com
Billing Alarms
Billing alarms are created using Amazon CloudWatch to notify you when your account billing exceeds a certain threshold.
How to Set Up a Billing Alarm:
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Enable Billing Alerts:
- From the Billing and Cost Management Dashboard, go to Preferences.
- Enable “Receive Billing Alerts” to allow CloudWatch to monitor your charges.
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Create an Alarm in CloudWatch:
- Go to the CloudWatch Console and select “Alarms” from the navigation pane.
- Click “Create Alarm” and select “Select metric.”
- Under “Billing,” select “Total Estimated Charge,” and choose the currency metric.
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Define the Alarm:
- Set the threshold that, when exceeded, should trigger the alarm (e.g., $300).
- Define the period over which the metric is evaluated (e.g., 6 hours).
- You can also choose to treat missing data as good (below threshold) or bad (above threshold).
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Set Notifications:
- Choose to create a new topic for an Amazon SNS notification or select an existing one.
- Add email addresses that should receive the billing alerts.
- You have the option to automatically take actions, such as stopping or terminating instances, if you integrate with AWS Lambda or other automation solutions.
Example Alarm Configuration:
Create a billing alarm when the estimated total charges for the AWS account exceed $300.
- Metric: Total Estimated Charge
- Threshold: $300
- Period: 6 hours
- Notification: Amazon SNS topic – billing-alerts
- Subscribers: sysadmin@example.com, finance@example.com
By setting up AWS Budgets and billing alarms, you can better manage your AWS costs and receive alerts before overspending. These tools are essential for AWS Certified SysOps Administrators to ensure they operate within their financial means while efficiently managing AWS resources.
Answer the Questions in Comment Section
True or False: AWS Budgets can only be used to track the cost associated with AWS services, and not usage like the number of EC2 instances.
- (A) True
- (B) False
Answer: B) False
Explanation: AWS Budgets can be used to track both costs and usage, such as the number of EC2 instances or the amount of data transferred.
True or False: AWS Budgets allows you to set custom alerts when your costs or usage exceed predefined thresholds.
- (A) True
- (B) False
Answer: A) True
Explanation: AWS Budgets lets you set custom budget alerts to notify you via email or SNS notification when you exceed your specified thresholds.
Which AWS service is used to create billing alarms?
- (A) AWS CloudWatch
- (B) AWS Budgets
- (C) AWS Cost Explorer
- (D) AWS Billing Console
Answer: A) AWS CloudWatch
Explanation: AWS CloudWatch is used along with billing metrics to create alarms that trigger notifications when billing thresholds are exceeded.
True or False: Billing alarms using AWS CloudWatch are available in all AWS regions.
- (A) True
- (B) False
Answer: B) False
Explanation: Billing alarms in AWS CloudWatch are available in the AWS regions, you have to use the N. Virginia region (us-east-1) to set billing metrics.
Can you set up AWS Budgets to forecast your future AWS spend based on historical usage?
- (A) Yes
- (B) No
Answer: A) Yes
Explanation: AWS Budgets has a feature for forecasting your future spend based on your historical usage patterns.
True or False: When you create an AWS Budget, you can only set it to monitor costs on a monthly basis.
- (A) True
- (B) False
Answer: B) False
Explanation: When creating an AWS Budget, you can select a monthly, quarterly, or annually time period to monitor costs and usage.
What is the minimum granularity level for AWS Budgets’ time period?
- (A) Yearly
- (B) Quarterly
- (C) Monthly
- (D) Weekly
Answer: C) Monthly
Explanation: AWS Budgets supports monthly, quarterly, and yearly time periods, with monthly being the minimum granularity.
True or False: AWS Free Tier usage alerts are automatically activated when you create a new AWS account.
- (A) True
- (B) False
Answer: A) True
Explanation: AWS provides default Free Tier usage alerts to notify you when you are approaching your limits for free tier-eligible services.
True or False: AWS Budgets can be used to monitor Reserved Instances (RI) and Savings Plans utilization and coverage.
- (A) True
- (B) False
Answer: A) True
Explanation: AWS Budgets can track both the utilization and coverage of Reserved Instances and Savings Plans, helping you optimize your costs.
To receive alerts via Amazon Simple Notification Service (Amazon SNS) for billing alarms, what must be done?
- (A) Subscribe to an Amazon SNS topic
- (B) Enable AWS Cost Explorer
- (C) Grant necessary IAM permissions to AWS Budgets
- (D) Increase the spending threshold to above your current budget
Answer: A) Subscribe to an Amazon SNS topic
Explanation: To receive notifications for billing alarms, you must first create and then subscribe to an Amazon SNS topic.
True or False: AWS Budgets can be automatically applied to tag costs if the resources are appropriately tagged.
- (A) True
- (B) False
Answer: A) True
Explanation: AWS Budgets can track costs associated with specific tags as long as the resources are tagged.
In AWS, which of the following actions can directly stop your AWS services from incurring costs when a budget threshold is breached?
- (A) AWS Budgets’ automated response action
- (B) AWS CloudWatch alarm action
- (C) Manual intervention
- (D) None, AWS does not allow services to be stopped automatically due to budget breaches
Answer: D) None, AWS does not allow services to be stopped automatically due to budget breaches
Explanation: AWS Budgets and Billing Alarms can notify you of breaches, but they cannot automatically stop services from incurring costs. This requires manual intervention or custom automation outside of AWS’s built-in Budgets capabilities.
Great walkthrough on configuring AWS Budgets and billing alarms! This will be really helpful for the SOA-C02 exam.
Thanks for the detailed guide!
How do you handle budget notifications for multiple accounts?
Has anyone tried integrating AWS Budgets with Slack for notifications?
This blog is really useful for beginners attempting the SOA-C02 exam!
Appreciate the effort put into this post!
One question: Can you automate the process of creating budgets using CloudFormation?
Very comprehensive post. Thanks!