When setting up infrastructure for a startup, cost control is not something to “add later.” It has to be built into the foundation from the very beginning.
AWS operates on a pay-as-you-go model. That flexibility is powerful, but it also means that a small misconfiguration, an unused resource, or an unexpected traffic spike can quickly turn into a serious bill.
On Day 1, we focused on security (root user, IAM, MFA).
On Day 2, we make sure we never get surprised by costs.
Avoid unexpected AWS bills by setting up:
Budget alerts
Cost anomaly detection
Billing alarms
Step 1 — Create a Budget
The first and most important control is a simple monthly budget.
Navigate in AWS Console
Go to:
Billing → Budgets → Create budget
Budget Setup
Choose:
Budget type: Cost budget
Period: Monthly
Configure Alerts
Creating a budget alone is not enough.
Alerts are what make cost control actually useful.
Recommended setup:
60% of budget → Email notification
80% of budget → Email + SNS notification
100% of budget → Critical alert
To configure alerts properly, switch from the simplified template to:
Customize (advanced)
This allows you to define precise thresholds and notification behavior.
After selecting Customize (advanced) and setting your budget amount:
Scroll down to the Alerts section
Click Add an alert threshold
Recommended Alert Setup (Best Practice)
To get full visibility, configure three alert levels:
- 50% — Early Warning Threshold: 50% Type: Actual cost Notification: Email
This is your first checkpoint.
It helps you detect:
Unused resources
Misconfigurations
Unexpected usage
- 80% — Risk Level
Threshold: 80%
Type: Actual cost
Notification: Email + SNS (optional)
At this stage, you should actively investigate your spending.
- 100% — Critical
Threshold: 100%
Type:
Forecasted cost
This is the most important alert. The forecasted cost option allows AWS to warn you before you actually exceed your budget.
If you see your budget and alert thresholds, this step is complete.
Step 2 — Cost Anomaly Detection
Budgets are static. They only track thresholds.
But what if something unusual happens before reaching your budget?
That’s where anomaly detection comes in.
Navigate in AWS Console
Go to:
Billing → Cost Anomaly Detection
Create a cost monitor:
Choose Monitor Type:
Choose Managed by AWS:
AWS automatically analyzes your historical usage
It learns your normal spending patterns
It detects anomalies without manual configuration
This is the best choice for startups and early-stage setups.
Select AWS Services for Monitor Dimension. This will:
Track spending per service (EC2, S3, RDS, etc.)
Detect anomalies within each service
Configure alert subscriptions
An alert subscription notifies you when a cost monitor detects an anomaly. Depending on the alert frequency, you can notify designated individuals by email or Amazon SNS.
Create a New Subscription
Subscription Name
Use something descriptive:
Cost-Anomaly-Alerts
Startup-Billing-Alerts
DevOps-Cost-Monitor
This becomes important when you have multiple teams or monitors.
- Alerting Frequency
AWS gives you 3 options:
Individual Alerts
You get notified immediately when an anomaly is detected
Best for production environments and critical cost control.
Daily Summaries:
AWS groups anomalies and sends once per day
Best for low-noise monitoring and early-stage setups.
Weekly Summaries:
Lowest noise, but slow response
Blog recommendation
Use Individual alerts if you want real-time control.
Use Daily summaries if you want less noise.
Alert Recipients, write here the email address.
Threshold
When configuring the threshold, you can choose between an absolute amount or a percentage above expected spend. Amount-based thresholds are better for controlling real financial impact, while percentage-based thresholds are more effective at detecting unusual behavior relative to your normal usage.
Choose: When the anomaly impact is 25.00% above the expected spend, you receive anomaly alerts.
CloudWatch Billing Alarm
If your goal is simply to track spending and receive alerts, AWS Budgets is enough and you do not need CloudWatch alarms. CloudWatch billing alarms become useful when you need automation, integrations, or real-time operational responses.
In most startup setups, Budgets handle visibility, while CloudWatch is added later for advanced control.