Cut Your AWS Bill: The Essential 7-Step Cost Optimization Checklist

Is your AWS infrastructure starting to feel out of control? If surprise charges and sudden billing spikes keep catching you off guard, it’s time to put a cost-optimization plan in place.

Your application and business should showcase your growth, not your AWS bill. This checklist will guide you through identifying which parts of your AWS environment should be scaled down, shut off, or committed to long-term savings.

Understanding Your AWS Costs

AWS costs are largely driven by compute, storage, and outbound data transfer. Core services like Amazon EC2, Amazon S3, and Amazon EBS have the biggest influence on your bill. In fact, EC2 and EBS combined can account for up to 70% of your total charges.

Why is my AWS Bill Rising?

The number one reason for higher-than-expected AWS costs is usually unused resources. Other common reasons for an increase include:

• Overprovisioning of resources.
• Not considering costs associated with data retrieval, transfer, and request.
• Missing out on saving plans, like Reserved Instances.
• Security breaches to your AWS accounts.

AWS offers pricing flexibility, where you pay only for what you use without being locked into long-term contracts. Utilize tools like Cost Explorer and Budgets to track and analyze spending effectively.

The 7-Point AWS Cost Optimization Checklist

To effectively manage your cloud spend, here are the essential best practices broken down into seven key areas:

1. Monitoring & Visibility

You can’t optimize what you can’t measure. Ensure you have clear visibility into your spending:

• Enable AWS Cost Explorer and analyze usage trends.
• Set up AWS Budgets with alerts for cost and usage thresholds.
• Use AWS Cost Anomaly Detection to catch unusual spikes.
• Enable Detailed Billing Reports (DBR) or Cost & Usage Reports (CUR) for fine-grained visibility.
• Tag resources consistently (e.g., by team, environment, project) for chargeback/showback.

2. Compute Optimization

Since compute has the biggest impact on your bill, focusing here yields high returns:

• Right-size EC2 instances using AWS Compute Optimizer recommendations.
• Commit to Reserved Instances (RIs) or Savings Plans for predictable workloads.
• Leverage Spot Instances for fault-tolerant workloads.
• Move workloads to Serverless (AWS Lambda, Fargate) where applicable.
• Terminate idle or orphaned instances (check stopped EC2 with attached volumes).

3. Storage Optimization

Reduce costs by managing your data lifecycle and storage tiers:

• Clean up unused or old EBS volumes and snapshots.
• Use S3 lifecycle policies to move data to cheaper tiers (Glacier, Infrequent Access).
• Enable S3 Intelligent-Tiering for unpredictable access patterns.
• Delete orphaned S3 buckets and objects not in use.

4. Data Transfer & Networking

Data transfer, especially inter-region, can be costly:

• Minimize inter-region data transfers—keep data close to compute.
• Use CloudFront CDN to cache and reduce S3/EC2 outbound transfer costs.
• Consolidate NAT Gateways and use VPC endpoints for S3/DynamoDB to avoid data transfer charges.
• Optimize Load Balancer usage (remove unused ALBs/ELBs).

5. Database & Analytics

Optimize your relational and data warehousing services:

• Right-size RDS/Redshift instances based on usage patterns.
• Turn on RDS Aurora Serverless for variable workloads.
• Scale down or shut off dev/test databases during off-hours.
• Use Reserved Instances/Savings Plans for predictable database workloads.

6. Tools & Automation

Automate your cleanup and use AWS-native tools for efficiency:

• Enable Trusted Advisor cost optimization checks.
• Implement Instance Scheduler to stop non-production resources during nights/weekends.
• Automate resource cleanup with AWS Config rules or Lambda scripts.
• Use Compute Optimizer and Performance Insights.

7. Governance & Best Practices

Implement policies for long-term cost accountability:

• Enforce resource tagging policies for cost accountability.
• Separate accounts using AWS Organizations for clearer billing by team/project.
• Establish chargeback/showback models internally.
• Train teams on cost-aware architecture design.

Ready to Optimize?

Reducing AWS costs is a continuous task that requires teams to stay up-to-date with AWS services, pricing models, and saving plans. At SoftBridge Digital, we have AWS-certified professionals who can help you orchestrate a personalized strategy to build, migrate, or optimize your cloud infrastructure for a secure and cost-efficient experience.

Our solutions include Cloud & DevOps, Mobile & Web App Development, UI/UX Design, and more.

Schedule a FREE consultation today and take control of your cloud expenses, security, and performance.