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AWS Budgets icon

AWS Budgets Popularsince 2015

A service that lets you set budgets for costs, usage, and RI/Savings Plans coverage, and sends alerts when thresholds are exceeded

About 3 min readWritten and edited by Awashiro

What It Does

AWS Budgets lets you set budget limits on your AWS costs and usage, and sends notifications via email or SNS when you approach or exceed those limits. You can create four types of budgets: cost budgets, usage budgets, RI (Reserved Instance) coverage budgets, and Savings Plans coverage budgets. It also supports automated actions when budgets are exceeded, such as applying IAM policies or stopping EC2/RDS instances.

Use Cases

Budgets is used for managing monthly AWS spending limits, allocating costs and budgets by department or project, early detection of unexpected cost increases in development environments, and monitoring RI and Savings Plans utilization. It is especially important for organizations just getting started with AWS to prevent unexpected high bills.

Everyday Analogy

Think of it like a mobile phone bill alert. You set a spending limit on your monthly data charges (AWS costs), get notified when you reach 80%, and receive an alert when you exceed 100%. You can even set up automatic actions to throttle data usage (stop resources) when the limit is exceeded. It's a safety mechanism to prevent overspending.

What Is AWS Budgets?

AWS Budgets is a budget-setting and notification service for managing your AWS costs. Since cloud services use pay-as-you-go pricing, misconfigured settings or forgotten resources can lead to unexpectedly high bills. With Budgets, you can set a monthly budget and receive notifications when you reach a certain percentage of it. It's one of the first services every AWS user should set up.

Types of Budgets

AWS Budgets supports four types of budgets. Cost budgets set a cap on your monthly spending. Usage budgets monitor specific resource usage such as EC2 running hours or S3 storage volume. RI budgets and Savings Plans budgets let you choose either utilization or coverage as the monitoring target, and notify you when the metric you chose falls below its target. You can set multiple alert thresholds for each budget.

Budget Actions

Budget Actions is a feature that automatically executes actions when a budget threshold is exceeded. For example, when a development environment budget exceeds 100%, it can automatically apply an IAM policy that restricts new resource creation, or stop EC2 instances. You can choose whether actions execute immediately or require approval first. This is an effective mechanism for automatically curbing unintended cost increases.

Getting Started

Go to the Budgets menu in the AWS Billing console and click "Create budget." Select "Monthly cost budget" as the template and enter your budget amount (e.g., $100/month). Set up a notification email address and you're done. You'll receive notifications when you reach 80% and 100% of your budget. Start by setting up a single cost budget for your entire account.

Things to Watch Out For

  • Budgets that only monitor cost or usage are free no matter how many you create. Charges apply to budgets with Budget Actions enabled: the first two are free, and each additional one is charged (as of August 2026).
  • Budget notifications are not real-time and depend on cost data update frequency (typically about 3 times per day), so there may be a delay of several hours.
  • Do not apply Budget Actions that stop EC2 instances to production environments. Limit this feature to development and testing environments.

References (Official AWS Resources)

The primary sources for this page are the official AWS website and documentation. Check the official pages below for the latest specifications and pricing.

If this page and the official documentation disagree, treat the official documentation as authoritative.

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