AWS Cost Optimization Skill Guide

Overview

The AWS Cost Optimization skill provides structured guidance for reducing AWS spending through five optimization pillars and twelve actionable best practices. This skill leverages AWS native tools to identify savings opportunities and establish ongoing cost governance.

Skill Details

When to Use This Skill

Use this skill when you need to:

• Optimize AWS costs or review AWS spending
• Find unused or under-utilized AWS resources
• Implement FinOps practices for cloud cost governance
• Reduce EC2, EBS, S3, or load balancer bills
• Choose between On-Demand, Spot, Reserved Instances, and Savings Plans
• Configure AWS Budgets, Cost Explorer, or Cost Anomaly Detection
• Perform an AWS Well-Architected Framework cost pillar review

Trigger Phrases

• "Optimize my AWS costs"
• "Review AWS spending"
• "Find unused AWS resources"
• "Help me with FinOps"
• "How can I reduce my EC2 bill?"
• "Clean up unused EBS volumes"
• "Set up AWS Budgets"

Five Optimization Pillars

Pillar 1 — Right-Size

Match provisioned resources to actual workload needs.

• Pull 14-day average CPU/memory metrics from CloudWatch for every EC2 instance
• Cross-reference with AWS Compute Optimizer recommendations
• Flag instances where peak utilization stays below 40%
• Recommend downsizing to the next smaller instance family/size
• For RDS, check read/write IOPS vs. provisioned capacity

Pillar 2 — Increase Elasticity

Schedule instance stop/start and leverage Auto Scaling Groups.

• Identify non-production instances running 24/7 (dev, staging, QA)
• Propose stop/start schedules using AWS Instance Scheduler or EventBridge rules
• Review Auto Scaling Group policies for over-provisioned min/desired counts
• Recommend target-tracking scaling policies tied to actual demand metrics
• Consider Lambda or Fargate for bursty, event-driven workloads

Pillar 3 — Leverage the Right Pricing Model

Choose the optimal mix of On-Demand, Spot, Reserved Instances, and Savings Plans.

• Analyze steady-state baseline using Cost Explorer "RI Coverage" and "Savings Plans Coverage" reports
• Recommend Compute Savings Plans for consistent baseline compute
• Suggest Spot Instances for fault-tolerant, stateless workloads (batch, CI/CD runners)
• Evaluate existing Reserved Instances for utilization; resell unused RIs on the RI Marketplace
• Use the AWS Pricing Calculator to model total cost under each pricing option

Pillar 4 — Optimize Storage

Eliminate waste in EBS, S3, and snapshots.

• List unattached EBS volumes (available state) and recommend deletion after backup review
• Identify orphaned EBS snapshots no longer linked to an active AMI or volume
• Review S3 bucket metrics; recommend Intelligent-Tiering or lifecycle rules for infrequent access data
• Enable Amazon Data Lifecycle Manager (DLM) for automated snapshot retention
• Check for gp2 volumes that should be migrated to gp3 for cost and performance gains

Pillar 5 — Measure, Monitor, and Improve

Establish continuous cost governance.

• Implement a cost allocation tagging strategy (e.g., Environment, Team, Project, CostCenter)
• Configure AWS Budgets with threshold alerts (50%, 80%, 100%, forecasted)
• Enable AWS Cost Anomaly Detection for automatic spend anomaly alerts
• Set up a monthly Cost Explorer saved report for leadership review
• Create a Trusted Advisor check schedule for cost optimization recommendations

Twelve Actionable Best Practices

AWS Native Tools Reference

Review Process

Follow this structured flow when the user asks for a cost review:

1. Scope — Ask which AWS accounts, regions, and services to review
2. Data Gathering — Pull Cost Explorer data for the last 30–90 days; identify top-5 cost drivers
3. Pillar Walk-Through — Evaluate each of the five pillars in order
4. Checklist — Present the twelve best practices as a scored checklist (done / not done / partial)
5. Quick Wins — Highlight the three highest-impact, lowest-effort actions
6. Roadmap — Propose a 30/60/90-day optimization plan with estimated savings

Related Skills

• AWS Architecture Diagrams (aws-drawio-architecture-diagrams) - Create visual representations of AWS architectures
• CloudFormation VPC (aws-cloudformation-vpc) - Design cost-effective VPC architectures
• CloudFormation EC2 (aws-cloudformation-ec2) - Optimize EC2 cost configurations
• CloudFormation S3 (aws-cloudformation-s3) - Implement S3 lifecycle policies for cost savings

See Also

• AWS Well-Architected Framework - Cost Pillar
• AWS Cost Optimization Hub
• AWS Pricing Calculator
• AWS Compute Optimizer