Visibility is the foundation of every FinOps and AWS cost management practice. Without understanding the what, why, where, and whom behind your cloud costs, it’s nearly impossible to make informed decisions or build an effective optimization strategy. You can’t control what you can’t see and that’s what makes visibility the first and most critical step in cost governance.
But getting that visibility right isn’t easy. Across AWS environments, hundreds or even thousands of resources run simultaneously, each supporting different teams, projects, and services, and each priced differently depending on region, usage type, and configuration. Sorting through that complexity requires the right tools and the right approach.
Fortunately, AWS provides native tools designed to help you stay on top of your cloud spend. For example, AWS Cost Explorer helps you visualize and analyze your historical spending patterns, while AWS Budgets allows you to set custom spending thresholds and receive alerts when costs exceed expectations.
However, to truly take advantage of these capabilities, it’s essential to understand what each tool does best and how they differ. That’s where this guide can help.
This article breaks down how AWS Budgets and Cost Explorer compare in purpose, functionality, and best-fit use cases.
What Is AWS Budgets?
AWS Budgets is a native cost management tool that helps you set custom spending or usage thresholds and monitor them in real time. It allows you to define budgets across various dimensions such as cost, usage, discounts and more, giving you an ongoing view of how your actual spend compares to your planned limits. These thresholds can either be in dollar amounts or based on unit consumption rates. As spending approaches or exceeds these established limits, users can opt to receive real-time notifications.
The main purpose of AWS Budgets is to enable proactive financial control. Instead of discovering cost overruns at the end of the month, you can track your spending trends as they evolve and take corrective action before issues escalate. It’s a foundational tool for FinOps teams that want to enforce accountability, align spending with forecasts, and avoid budget surprises across departments or projects.
Access to AWS Budgets is available to all users; however, only the first two action-enabled budgets per month are free of charge. Any subsequent budgets with configured actions will incur a cost of $0.10 a day.
Key features of AWS Budgets
Custom budget creation
Set cost or usage budgets for specific accounts, services, linked accounts, and more. Customization options extend to the use of current tags and defined cost categories, enabling tailored alerts based on various criteria such as teams, production vs. development vs. application environments, or specific projects.
Automated alerts
Configure notifications to be sent via email, Amazon SNS, or modern collaboration tools like Slack or Microsoft Teams when your actual or forecasted spend exceeds (or is predicted to exceed) the budget threshold. These timely alerts help teams stay informed within their daily communication channels and respond before cost overages occur.
Forecast-based insights
AWS Budgets uses historical data to project future costs and usage patterns, allowing you to compare forecasts against actual trends and adjust budgets accordingly.
Integration with AWS Cost Explorer and AWS Budgets Actions
Budgets integrates with Cost Explorer for deeper analysis and with AWS Budgets Actions to automate responses, such as restricting IAM access or stopping specific resources when thresholds are reached.
Multi-dimensional tracking
Monitor costs across linked accounts, regions, or services, which is especially useful for organizations using consolidated billing or operating multi-team environments.
Automated policy enforcement
Allows users to execute automated actions as budgets get triggered, including IAM policy enforcement or discontinuing resource availability.
Use cases of AWS Budgets
The typical uses for AWS Budgets include monitoring costs and usage, creating scheduled reports, and responding to thresholds. But here’s more:
- Project-level budget tracking: Ideal for monitoring specific projects or workloads with defined spending limits, such as development or testing environments where resources can easily scale beyond plan.
- Multi-account cost control: Helps organizations with multiple business units or AWS accounts assign unique budgets and alerts to each, keeping spending aligned with ownership.
- Short-term or seasonal workloads: Commonly used for campaigns, research workloads, or training jobs that run for limited durations, ensuring temporary spikes do not exceed allocated budgets.
- Internal chargeback and showback: Enables finance teams to report costs by department, team, or application, improving accountability and enabling data-driven financial discussions.
- Automated spend enforcement: Through AWS Budgets Actions, teams can automatically stop or restrict resources once thresholds are reached, reducing waste and keeping costs predictable.
What Is AWS Cost Explorer?
AWS Cost Explorer is a native visualization and analytics tool that helps you track, analyze, and understand your cloud spending and usage trends over time. It provides detailed insights into how your AWS costs evolve daily, monthly, or annually, allowing you to identify spending patterns, anomalies, and potential optimization opportunities across accounts and services.
At its core, AWS Cost Explorer is designed to help teams move beyond static billing data and adopt a more analytical approach to cost management. Instead of simply tracking whether budgets are being met, it enables you to explore the underlying cost drivers such as specific services, linked accounts, regions, or tags, and determine where savings or efficiency improvements can be made.
Incorporating detailed dashboards, cost anomaly detection, and advanced filtering capabilities, Cost Explorer helps businesses diagnose where, when, and why spending takes place across all their AWS services.
By using interactive filters, charts, and reports, FinOps teams can visualize trends, compare costs between periods, and forecast future expenses. This level of visibility helps organizations take a proactive stance toward cost optimization rather than relying on reactive post-billing reviews.
Access to AWS Cost Explorer is included at no additional cost for most standard features, though some advanced reports or APIs may incur additional charges depending on usage volume.
Key features of AWS Cost Explorer
Interactive cost analysis
Visualize your AWS spending through dynamic graphs and tables. You can filter and group data by dimensions like service type, region, account, usage type, or tag to identify where your cloud costs are coming from and why they are changing.
Cost and usage reports
Generate daily, monthly, or custom reports that provide granular insights into your AWS usage and billing data. These reports help finance and engineering teams track spending over time and detect unusual cost spikes.
Forecasting and trend analysis:
Cost Explorer uses historical data to project future costs, helping you predict your expected spend for upcoming months. This is especially useful for planning budgets, managing cash flow, and anticipating future resource needs.
Savings Plan and Reserved Instance recommendations
The tool automatically analyzes your past usage patterns and recommends Savings Plans or Reserved Instance purchases that could reduce your costs. These insights are backed by real data and updated regularly as usage changes.
Tag and linked account filtering
Cost Explorer allows you to view spending at granular levels through tags and linked accounts. This makes it easier to allocate costs to specific departments, teams, or products, ensuring more accurate reporting and accountability.
Custom reports and data export
You can create and save custom views for recurring analysis and export detailed reports to share with finance or management teams for deeper review.
Integration with AWS Budgets and CUR (Cost and Usage Report)
Cost Explorer integrates with other AWS cost tools to provide deeper visibility and reporting consistency. For example, data from the Cost and Usage Report can enhance the accuracy of Cost Explorer insights, while AWS Budgets can use Cost Explorer’s analysis for setting better thresholds.
Use cases of AWS Cost Explorer
- Identifying cost spikes and anomalies: Monitor your daily or weekly spend to detect unexpected usage increases, such as unplanned scaling or resource misconfigurations, before they inflate monthly bills.
- Service-level cost breakdown: Analyze which AWS services consume the largest share of your budget, allowing teams to prioritize optimization efforts where they will have the most impact.
- Evaluating optimization results: After implementing optimization initiatives like rightsizing or instance scheduling, use Cost Explorer to verify whether costs actually decreased and assess the return on optimization efforts.
- Supporting executive reporting: Generate visual summaries and trends for quarterly or monthly cost reviews with leadership, demonstrating how cloud investments are performing relative to forecasts and business goals.
Key Differences Between AWS Budgets and AWS Cost Explorer
| Factor | AWS Budgets | AWS Cost Explorer |
| Primary purpose | Set spending or usage thresholds and monitor them in real time to prevent overruns. | Analyze historical and projected cost and usage trends across accounts, services, and resources. |
| Timeframe focus | Primarily forward-looking, with alerts based on actual and forecasted spend. | Historically focused, with the ability to project trends based on past usage. |
| Actionability | Can trigger automated actions when thresholds are reached, such as restricting IAM access or stopping resources. | Read-only insights; does not enforce actions but informs optimization decisions. |
| Setup complexity | Requires creating budgets, defining thresholds, assigning alerts and optional actions. | No setup needed; users can start exploring costs immediately with filtering and grouping. |
| Alerts and notifications | Real-time notifications via email or Amazon SNS when spend approaches or exceeds budgets. | No alerts natively; relies on scheduled reports or manual monitoring. |
| Visualization | Numeric summaries with threshold comparisons; alert indicators. | Rich visualizations including charts, graphs, and detailed breakdowns across accounts, regions, services, and tags. |
| Data granularity | Costs and usage can be tracked by linked account, service, tag, or cost category. | Deep analysis possible by service, region, linked account, tags, usage type, operation, and more. |
| Optimization support | Alerts inform teams but do not provide optimization recommendations. | Helps identify trends, anomalies, and waste, supporting proactive cost optimization. |
| Reporting frequency | Threshold-driven, real-time, or forecast-based alerts. | Reports can be run on demand or scheduled periodically for deeper analysis. |
| Scalability | Designed to monitor specific budgets for projects, accounts, or cost categories. | Handles large datasets and complex multi-account or multi-service environments efficiently. |
| Target users | Finance teams, managers, and teams responsible for enforcing budget limits. | FinOps, cloud architects, and engineering teams performing detailed cost analysis and planning. |
| Integration | Integrates with Cost Explorer for deeper analysis and AWS Budgets Actions for automation. | Integrates with AWS Budgets and other tools for cross-analysis, forecasting, and optimization planning. |
| Cost | First two action-enabled budgets per month are free; additional budgets cost $0.10 per day. | Included with AWS account; no additional charges for standard usage. |
| Best use cases | Enforcing project, team, or account-level budgets, alerting on overspend, automating spending control. | Analyzing cost trends, identifying areas of inefficiency, performing historical cost comparisons, planning future budgets. |
Which One Should You Use and When?
It’s not always easy to choose between AWS Budgets and AWS Cost Explorer. Ultimately, they’re not competing tools — they complement each other in managing cloud costs effectively. But, here’s how each fits in depending on what you’re trying to achieve:
Use AWS Budgets when you need proactive financial control.
If your goal is to prevent cost overruns before they happen, enforce accountability across teams or projects, or automate actions when thresholds are reached, AWS Budgets is your go-to tool. It is ideal for finance teams, project managers, and department heads who want to ensure spending aligns with forecasts and budget limits.
Use AWS Cost Explorer when you need deep analysis and insights.
If your priority is understanding why costs are increasing, identifying inefficiencies, and making data-driven optimization decisions, Cost Explorer provides the visibility and granularity required. Engineering teams, FinOps analysts, and cloud architects can use it to drill into historical usage, detect trends, and inform future budgeting and optimization strategies.
Together, Budgets and Cost Explorer provide complete cost governance from prevention to analysis, ensuring that every dollar spent in the cloud is intentional and optimized.
Maximizing Cost Management by Using AWS Budgets and Cost Explorer Together
To get the most value from AWS native tools, Budgets and Cost Explorer should be used as complementary solutions rather than in isolation. Here are practical ways to leverage both effectively:
- Start with Cost Explorer to analyze historical spend, usage trends, and service-specific patterns. Use this data to identify high-cost areas, seasonal spikes, and irregular usage that may require closer monitoring.
- Define budgets based on the insights gathered from Cost Explorer. Set thresholds for accounts, projects, services, or business units that reflect realistic spending limits while accounting for expected variations.
- Configure automated alerts in Budgets to notify teams when spend approaches or exceeds thresholds. Pair these alerts with Cost Explorer dashboards to provide context and historical perspective on why the threshold was triggered.
- Use Cost Explorer to monitor forecasted costs against budgets. This allows teams to anticipate potential overruns and make adjustments proactively rather than reacting after the fact.
- Periodically review and adjust budgets using trends from Cost Explorer. As workloads grow or new services are adopted, update budgets to reflect actual usage patterns and avoid false alarms or unnecessary restrictions.
- Integrate AWS Budgets Actions with Cost Explorer findings to automate operational responses, such as pausing or scaling resources when spending exceeds projections. This ensures that cost control is not purely reactive but also operationally effective.
- Encourage cross-team collaboration by sharing insights from Cost Explorer along with budget alerts. Finance, engineering, and operations teams can align on cost accountability, usage efficiency, and optimization opportunities.
- Treat this as an iterative process. As you gain more visibility and understand usage behavior better, refine both Cost Explorer dashboards and Budgets configurations to continuously improve governance and cost efficiency.
Take Control of Your Cloud Costs With ProsperOps
Identifying and addressing underutilized resources is a critical part of cloud cost optimization, but it’s only half the equation. Workload optimization reduces waste by using fewer resources, but to maximize savings, it needs to work hand in hand with rate optimization, which ensures you pay the lowest possible price for what you do use.
To ensure you get the optimal rates for your usage, leverage automation platforms like ProsperOps.
ProsperOps is a fully automated, multi-cloud cost optimization platform for AWS, Azure, and Google Cloud. It automates cloud cost optimization by adapting to your usage in real time, eliminating waste, maximizing savings, and ensuring every cloud dollar is spent effectively.
ProsperOps delivers cloud savings-as-a-service, automatically blending discount instruments to maximize your savings while lowering Commitment Lock-in Risk. Using our Autonomous Discount Management platform, we optimize the hyperscaler’s native discount instruments to reduce your cloud spend and help you achieve 45% ESR or more, placing you in the top 5% of FinOps teams.
In addition to autonomous rate optimization, ProsperOps now supports usage optimization through its resource scheduling product, ProsperOps Scheduler. Our customers using Autonomous Discount Management™ (ADM) can now automate resource state changes and integrate seamlessly with ProsperOps Scheduler to reduce waste and lower cloud spend.
Make the most of your cloud spend across AWS, Azure, and Google Cloud with ProsperOps. Schedule your free demo today!
