Introduction
Managing cloud costs is an important part of running workloads on AWS, especially for startups and growing businesses. As infrastructure expands, unused resources, oversized instances, unnecessary storage, and unexpected data-transfer charges can gradually increase the monthly AWS bill.
A regular cost review helps identify unnecessary spending while ensuring that applications continue to meet their performance, availability, and security requirements.
This checklist covers practical areas that can be reviewed to optimize AWS infrastructure costs without compromising business requirements.
Prerequisites
Before starting an AWS cost optimization review, ensure that you have:
- Access to the AWS account or required billing permissions.
- Access to AWS Cost Explorer.
- Knowledge of the AWS resources currently being used.
- Information about application workload and usage patterns.
- Understanding of production, staging, and development environments.
Implementation
1. Review AWS Spending
Start by reviewing the current AWS bill and identifying the services contributing most to the overall cost.
Check:
- Monthly AWS spending
- Service-wise costs
- Account-wise costs
- Region-wise costs
- Month-over-month cost changes
- Unexpected increases in spending
Use AWS Cost Explorer to analyze spending trends and identify areas requiring further investigation.
2. Identify Unused Resources
Unused resources can continue generating charges even when they are no longer required.
Review resources such as:
- EC2 instances
- EBS volumes
- Elastic IP addresses
- Load balancers
- NAT Gateways
- RDS databases
- S3 storage
- Snapshots
- Unused development environments
Remove resources that are no longer required after confirming that they are not needed for production, backup, or disaster recovery purposes.
3. Right-Size EC2 Instances
Check whether EC2 instances are appropriately sized for their actual workloads.
Review:
- CPU utilization
- Memory utilization
- Network usage
- Instance uptime
- Application workload patterns
If an instance consistently operates with significantly lower resource utilization, a smaller instance type may be sufficient.
Similarly, workloads that regularly experience resource constraints may require a more appropriate instance type.
4. Use Auto Scaling
For applications with variable workloads, consider using Auto Scaling to adjust infrastructure capacity based on demand.
For example:
Low Traffic
|
v
2 Instances
|
Traffic Increases
|
v
4 Instances
|
Traffic Decreases
|
v
2 Instances
This avoids maintaining unnecessary application capacity during periods of low traffic.
5. Review Instance Running Hours
Check whether development, testing, or staging instances need to run continuously.
Where appropriate, schedule non-production resources to stop outside working hours.
For example:
Working Hours
|
v
Instance Running
|
v
After Working Hours
|
v
Instance Stopped
This can significantly reduce compute costs for environments that do not need to operate 24/7.
6. Review EBS Volumes and Snapshots
Regularly review EBS volumes and snapshots.
Look for:
- Unattached EBS volumes
- Old snapshots
- Unused volumes
- Excessive snapshot retention
- Over-provisioned storage
Before deleting anything, verify that the resource is not required for backup or disaster recovery.
7. Optimize S3 Storage
Review S3 storage usage and identify objects that no longer require frequent access.
Consider appropriate S3 storage classes based on access patterns.
Also review:
- Old objects
- Versioned objects
- Incomplete multipart uploads
- Object retention requirements
- Lifecycle policies
S3 Lifecycle rules can automatically transition or expire objects according to defined requirements.
8. Review Database Resources
Database resources can represent a significant portion of infrastructure costs.
Review:
- RDS instance size
- Database utilization
- Storage allocation
- Read replicas
- Multi-AZ requirements
- Backup retention
- Database uptime
Avoid reducing database capacity or availability without first reviewing application and business requirements.
9. Review NAT Gateway Costs
NAT Gateway charges can become significant in architectures with high outbound traffic from private subnets.
Review:
- Data processed through NAT Gateways
- Number of NAT Gateways
- Cross-AZ traffic
- Services accessing AWS resources through NAT
Where appropriate, AWS VPC endpoints can be considered for communication with supported AWS services.
10. Monitor Data Transfer Costs
Data transfer can contribute significantly to AWS costs.
Review:
- Internet data transfer
- Cross-AZ traffic
- Cross-region traffic
- NAT Gateway traffic
- CDN usage
- Application-to-database traffic
The architecture should be reviewed if large volumes of unnecessary cross-region or cross-AZ traffic are identified.
11. Review Elastic IP Addresses
Check whether allocated public IPv4 addresses are actually required.
Release unused public IP addresses where they are no longer needed.
Public IPv4 usage can incur charges, so regularly reviewing allocated addresses can help avoid unnecessary costs.
12. Use AWS Budgets and Alerts
Set budgets for AWS spending and configure alerts when costs approach predefined thresholds.
For example:
Monthly Budget
|
+-- 50% → Monitor
|
+-- 80% → Review
|
+-- 100% → Investigate
This helps identify unexpected spending before it becomes a larger issue.
13. Use Resource Tagging
Implement a consistent tagging strategy for AWS resources.
Useful tags can include:
- Environment
- Application
- Project
- Department
- Owner
- Cost Center
For example:
Environment = Production Application = WebApp Owner = DevOps CostCenter = Engineering
Proper tagging makes it easier to understand where AWS spending is occurring.
14. Review Savings Plans and Reserved Capacity
For workloads with predictable and consistent usage, evaluate pricing options such as:
- AWS Savings Plans
- Reserved Instances
These options can reduce costs compared with on-demand pricing when the workload is expected to remain consistent.
Do not commit to long-term pricing models until the workload and usage patterns are sufficiently understood.
15. Review Non-Production Environments
Development and staging environments should be reviewed separately from production infrastructure.
Consider:
- Scheduling instances
- Reducing instance sizes
- Using smaller database resources
- Removing temporary resources
- Applying appropriate retention policies
Non-production environments should provide the required functionality without unnecessarily matching the scale of production infrastructure.
16. Review CloudWatch Logs
CloudWatch Logs can grow over time and increase storage costs.
Review:
- Log retention periods
- High-volume log groups
- Duplicate logs
- Debug logging enabled in production
- Unnecessary historical logs
Configure appropriate retention periods based on operational, security, and compliance requirements.
17. Regularly Review AWS Cost Optimization
Cost optimization should not be treated as a one-time activity.
A regular review should cover:
- Monthly AWS spending
- Resource utilization
- Unused resources
- Storage growth
- Data transfer
- Database usage
- Compute requirements
- Savings opportunities
AWS Cost Optimization Checklist
| Area | Check |
|---|---|
| AWS Billing | Review monthly spending |
| EC2 | Right-size instances |
| Auto Scaling | Match capacity with demand |
| Non-Production | Stop unused resources |
| EBS | Remove unused volumes |
| Snapshots | Review retention |
| S3 | Configure lifecycle policies |
| RDS | Review size and utilization |
| NAT Gateway | Monitor data processing |
| Data Transfer | Review cross-AZ and cross-region traffic |
| Public IPv4 | Remove unnecessary addresses |
| CloudWatch | Review log retention |
| Tagging | Tag resources consistently |
| Savings Plans | Evaluate predictable workloads |
| AWS Budgets | Configure cost alerts |
Conclusion
AWS cost optimization is an ongoing process that requires regular monitoring of infrastructure usage, resource utilization, storage, networking, and application requirements.
By identifying unused resources, right-sizing workloads, optimizing storage, monitoring data transfer, scheduling non-production environments, and using appropriate AWS pricing options, organizations can reduce unnecessary cloud spending while maintaining the required performance and availability.
The objective of cost optimization should not simply be to reduce the AWS bill. It should be to use AWS resources efficiently while maintaining the security, reliability, performance, and availability required by the business.
Frequently Asked Questions
1. What is the first step in AWS cost optimization?
The first step is to review current AWS spending using tools such as AWS Cost Explorer. Identify the services, regions, and resources contributing most to the monthly bill before making optimization changes.
2. How can startups reduce AWS costs?
Startups can reduce AWS costs by right-sizing resources, removing unused infrastructure, scheduling non-production environments, optimizing S3 storage, monitoring data transfer, setting budgets and alerts, and evaluating Savings Plans when workloads become predictable.
3. How often should AWS costs be reviewed?
AWS costs should ideally be monitored continuously, with a detailed cost optimization review performed regularly, such as monthly. Significant changes in application traffic or infrastructure should also trigger an additional review.
Related Articles
AWS Infrastructure Architecture for Startups
How to Set AWS Billing Budget Email Notification
Talk to Our Technology Experts
Planning your AWS infrastructure or looking to improve an existing cloud environment? Our team can help with cloud architecture, infrastructure, DevOps, security, deployment, and ongoing optimization.