7-Day AWS Refresher Series - Day 7: AWS Cost Management & Optimization

After six days of diving deep into core AWS services, today we focus on a critical, often underestimated topic: Cost Awareness. The best cloud architects not only build scalable and resilient systems- they also build cost-effective ones.

Let’s explore how AWS provides tools and strategies to help you monitor, forecast, and optimize cloud spend.

Why Cost Management Matters

• Cloud gives flexibility - but without visibility, flexibility turns into leakage.

• You can't improve what you don’t measure.

• Cost-efficiency is a shared responsibility - developers, architects, and finance teams must align.

Key AWS Cost Tools

AWS Billing Dashboard

• Visual overview of charges across services.

• Track spending trends month-over-month.

Cost Explorer

• Analyze spend by service, region, linked account, or tag.

• Create custom reports with filtering (e.g., EC2 vs Lambda cost split).

• Forecast future spend based on trends.

Budgets & Alerts

• Set monthly or project-based cost limits.

• Trigger email/Slack alerts when thresholds are reached.

Cost Anomaly Detection

• Uses ML to detect unusual spikes in cost.

• Helps spot forgotten resources or misconfigured workloads.

Optimization Techniques

Right-Sizing Resources

• Use Compute Optimizer for EC2, RDS, Lambda recommendations.

• Drop oversized or underutilized resources.

Choose the Right Pricing Model

• On-Demand: Flexibility with higher cost.

• Reserved Instances: Commit to 1 or 3 years for up to 75% savings.

• Spot Instances: Great for fault-tolerant or batch jobs - up to 90% off.

Leverage Savings Plans

• Flexible across instance families and regions.

• Covers EC2, Fargate, and Lambda under one plan.

Storage Optimization

• Use lifecycle rules for S3 to move infrequent data to cheaper tiers.

• Delete unattached EBS volumes and unused snapshots.

• Compress and archive rarely accessed data.

Networking Cost Tips

• Avoid unnecessary cross-AZ or cross-region data transfer.

• Use VPC endpoints to avoid NAT Gateway charges.

• Consolidate API calls where possible to reduce request costs.

Tagging for Cost Allocation

• Implement a standardized tagging strategy (e.g., Project, Owner, Environment).

• Enable cost allocation tags in Billing settings.

• Makes it easier to billback or track per team/service usage.

Hands-On Lab

Goal: Set up real-world cost controls and insights for your AWS usage.

Lab Tasks:

• Enable Cost Explorer and create a report for EC2 and S3 usage over 30 days.

• Set a monthly budget with alerting at 80% threshold.

• Analyze a Compute Optimizer recommendation and resize a running EC2 instance.

• Create an S3 lifecycle policy to transition objects to Glacier after 30 days.

• Tag resources using a standard format and view usage by tag in Cost Explorer.

Key Questions to Master

• When should I choose Reserved Instances over Savings Plans?

• How does Compute Optimizer recommend instance changes?

• What are common sources of cost leakage in AWS accounts?

• How do lifecycle rules help cut down long-term S3 costs?

• Why are cost allocation tags essential in multi-team organizations?

7-Day AWS Refresher - Final Takeaway

In this one week series, we revisited the pillars that power modern cloud architecture - from compute, storage, and networking to event-driven design, global scalability, and cost optimization. This wasn’t just about brushing up - it was about regaining architectural clarity, revisiting core services with intent, and realigning with AWS best practices.

Whether you're leading migrations, mentoring teams, or architecting your next big idea, the fundamentals covered here will keep you grounded and decisive.

Cloud mastery isn’t a destination - it’s a discipline. Keep learning, keep building and stay amazing!