Exercise: Setting up your AWS Budget

Natasha Ong
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4 min read

Exercise overview:

In this exercise, you will start by creating a budget for $100 that will notify you whenever you come up on $50 of spend. Next, you will create a report of that budget so that you can receive weekly email alerts that tells you how much spend you’ve incurred on AWS. Finally, you will create a free-tier budget that will notify you when you exceed the free-tier of AWS services for a use case like a personal account or self-study within AWS.


By the end of this exercise, you should be able to do the following:

  • Create a custom budget with alerts
  • Create a report of that budget
  • Create a free-tier budget

Task 0: Sign In to the AWS Management Console

Log in to the AWS Management Console using this link.

Task 1: Create a custom budget

  1. To create a custom budget, go to the search box type AWS Budgets, and click AWS Budgets that will appear on the search result.
  2. Once you're in the AWS Budgets dashboard. Click Create a budget.
  3. You're now on the Choose budget type page, under Budget setup select Customise (advanced).(Later on in this exercise, you will select the Use a template (simplified). For now, you will learn how to manually create a Cost budget using the Customise (advanced) budget setup.)
  4. Once you select Customise (advanced), the page will change its settings. Under Budget types, select Cost budget (Recommended)(Cost budgets allow you to plan your service costs and are particularly useful if you have a known amount you don't want to exceed. You can set fixed or monthly budgets based on the total cost or by individual or grouped AWS services. You can see the use cases of the other budget types in their descriptions.)
  5. Once you select Cost budget (Recommended), click Next.
  6. On the Set your budget page, enter the needed information:
  7. Budget name: give your budget a name that is relevant to your budget, for example, "Monthly budget"
  8. Period: You can set your period by daily, monthly, quarterly, and annually. For this exercise, you will select Monthly because that is the frequency at which you incur your bill from AWS by default. Therefore, select Monthly on the dropdown.
  9. Budget renewal type: In this exercise, you will choose a Recurring budget to monitor your AWS costs over time
  10. Start month: Select the current month. This means you will start monitoring of your AWS cost from this month.
  11. Budgeting method: In this exercise, you will select Fixed budget to track your single monthly budgeted amount. (You would use the other two options if we want our budget to change month to month)
  12. Enter your budgeted amount ($): Enter 100, as this is your fixed budget in this exercise.
  13. Budget scope: Choose All AWS services (Recommended)
  14. Once all is done on this page, click Next
  15. On the Configure alerts page, you will create an alert. If you'd like to get proactive email alerts whenever you come close to exceeding that budget, set a threshold. In this exercise, set the threshold at 50 percent. (You can see the Summary message after you set the threshold)
  16. The Trigger dropdown lets you decide when you want to get the email alert: Actual means you get notified when you've already spent the threshold amount, whereas Forecasted means you get notified when AWS thinks you might end up spending the threshold amount after setting up a new resource.
  17. After you set the threshold, you will enter the email recipient (this is for you to receive the alert if you exceed the threshold via email). Enter your email.
  18. Once all is done on the Configure alerts page, click Next.
  19. The next page (Attach actions) is optional and will skip it. Click Next.
  20. On the Review page, click Create budget.

Now you have successfully created your first budget, you can explore this by checking the check box before the name of your budget. You can see on the right side the graphical overview and a visual representation of your budget and the threshold that you set up.

Task 2: Create a budget report

IMPORTANT: AWS charges you $0.01 for every budget report it sends you, even if you're on a Free Tier account. If you do not want to be charged at all by AWS, please feel free to skip this task. Even if you don't have a budget report, AWS will still notify you (for free) when you're hitting your budget thresholds. If you do want to create a budget report, we'd recommend having one on a weekly/monthly basis rather than daily to avoid high fees.

In this task, you will set up a budget report. The budget report will allow you to be sent weekly, daily, or monthly emails about your budget rather than only being notified whenever you exceed your threshold. This is good for customers who would like to proactively monitor and be proactively notified of their weekly, daily, or monthly AWS spend.

  1. To set up a budget report, select (check the box) the budget that you created on Task 1, click Actions, and click Create budget report.
  2. On the Create budget report page, enter the needed information:
  3. Budget report name: give a name, for example, "Weekly budget report"
  4. Select budgets: You already selected your budget here therefore no further actions are needed.
  5. Delivery settings: In these settings, you will select Weekly every Sunday of the week.
  6. Email recipients: Type your email address so that you will receive your weekly budget report via email.
  7. Once all is done, click Create budget report.

Task 3: Create a free-tier budget

In this task, you will create your final budget which is the zero-spend budget or free-tier budget.

  1. To set up a free-tier budget, return to the budges overview page click Create budget.
  2. Under Budget setup, choose Use a template (simplified)
  3. Under Templates - new, choose Zero spend budget. The zero spend budget will notify you if you exceed the free-tier of your AWS account. This is great for individual learners or people who don't want to incur any charges on AWS because this will notify you when you exceed your free-tier limits and are about to incur your first U.S. dollar of AWS charges.
  4. Enter the needed information:
  5. Budget name: give a name, for example, Free-tier budget
  6. Email recipients: your email address that you want to receive your free-tier alert budget.
  7. Once all is done, click Create budget.

Here's what you'd see if you've gone over your budget:

AWS will even send you an email!

Congratulations! You were able to successfully do the following:

  • Create a custom budget with alerts.
  • Create a report of that budget
  • Create a free-tier budget