How To Reduce Amazon AWS Monthly Billing

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Amazon is a giant among giants. Their AWS services have completely transformed the industry of cloud based services. With their custom range service pricing and a rich variety of services and features, your cloud billing can quickly become a dense tangled web of charges. Many of the Unnecessary and avoidable costs can slip in unnoticed on your bill. Without proper understanding of your usage and spending, your monthly bills can be far higher than they need be. Let’s first get to know what AWS is and then we’ll move to the part of how you can minimize on your AWS monthly bills.


Amazon Web Service is a subsidiary of Amazon. They provide customized cloud computing platforms and services with paid subscriptions. In simpler words, AWS is a way of obtaining a large-scale computing capacity that is quicker and cheaper than building an actual physical cluster of servers.

They provide a vast range of services from Computing, Networking, Mobile Services, Deployment and so much more in the list. The most popular of all the services are Amazon Elastic Compute Cloud (EC2) and Amazon Simple Storage Service (ES3).

Now if you don’t manage your AWS service properly, you could end up paying more than you bargained for. I mentioned it’s cheaper previously but how?  They offer a variable cost model depending on the services you acquire. SO that saves you from buying a whole package with services you don’t need. That is a great option to avail but your chosen package could quickly turn into something more expensive than initially anticipated.

Here are some tips that will help you reduce your Amazon AWS monthly costs.

Right-Size Your Instances



An Instance in cloud computing is a virtual server. Most customers utilize 30% of their AWS instances, in terms of CPU utilization. By right-sizing your instances, I mean:

You need to monitor your instances by using some cloud cost optimization tool. They show how much of the CPU, memory or processing resource you are using and what should be your ideal use and much more.

This will best align your cloud usage with your business needs and goals, and of course your budget. Some of the best cloud optimization tools include Cloud Management Suite, HPE Hybrid Cloud Management, Turbonomic etc. You can also learn more about cloud cost optimization on

On the other hand, you can reduce cloud costs by reviewing workload of instances and categorizing them by memory intensive or CPU intensive instances. Use instances to a max of 80% to fully utilize on your budget and make the best use of your money.

Keep A Check On Unused Cloud Storage

Unused cloud storage includes orphaned snapshots and unattached volumes. Once you terminate an EC2 instance, unlike the attached volumes, snapshots still remain. Most people do not remember to clean up those abandoned snapshots even if they no longer need to stay backed up in the storage for future use. Unless you want to keep orphaned snapshots for creating future EBS volumes, Elastic Block Store, delete them as part of your cloud housekeeping. You could make this process a lot easier if every volume is tagged on creation with basic metadata about the creator and the purpose of creation of those snapshots.

Unused Elastic IP Addresses (EIPS)


AWS assigns EIPs to all active instances. If you stop using an instance or an acquired resource, AWS charges a small hourly fee on EIPs associated with those instances or resources. Save yourself the extra cost and employ mechanisms that release EIPs upon termination of any instance, provided you do not plan to use that instance in the near future.

Reduce Cost By Careful Data Transfers

When you transfer data in, EC2 takes it in for free, but when you transfer data out of your cloud, you are charged some fee. The costs of transferring data out of EC2 can get out of control very quickly. You need to be mindful of that WHEN you are migrating data in on your cloud.

Re-hosted applications could incur higher data transfer costs as they are not configured to use AWS features, you may need to change their architecture to make sure that data is transferred using the least expensive route.

Utilize Reserved Instances (RI)

Reserved Instance is a reservation of cloud resources, for a yearly period of 1 to 3 years. You are charged for all the hours of your year duration. If you require a web service for more than a year or two, choosing RI is the best option. You get a 30% to 60% discount because of the reduced per hour usage cost with RI.

As I mentioned earlier, by using a cost optimization tool, you can easily monitor the capacity of your use and determine if RI is the right choice for you.

Reserved instances can also be repurposed in AWS without incurring any penalty provided you are not using them as part of the initial instance configuration.

The best thing about acquiring RI is that you can sell them on the AWS marketplace if you feel like they are underutilized or you don’t need to use them any longer.

Some other best practices you could work on for cost reduction include:

  • Keeping a close watch on Amazon analytics.
  • Turning on billing notifications, so you stay updated.
  • Consult a trusted advisor to help guide you in choosing the right options.
  • Depending on your use, you could also use Spot Instances with Reserved Instances.
  • Monitoring idle instances and keeping them turned off.
  • For more optimized performances, you can also employ Scheduled Instances.

The key to Optimized and reduced AWS costs is continues monitoring. Costs associated with cloud services have a way of lurking around in your monthly bill. Especially with customized pricing models, different cost structures and services, one is bound to over look some service utilization that they did not actually need or are not currently using. Take extra precaution if you have a complex cloud architecture in play because even the smallest mistake could prove to be fatal.

Feeling ready to save on your AWS invested money? Let us know in the comment section.


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