How Can a Company Get Notified When an AWS Cost Threshold Is Reached?

CLF-C02 By islever Editorial Last updated

Understand resources for billing, budget, and cost management.

Short answer

BD Use AWS Budgets cost-threshold alerts and a CloudWatch billing alarm on EstimatedCharges to notify through Amazon SNS.

Question

A company wants to receive a notification when a specific AWS cost threshold is reached.
Which AWS services or tools can the company use to meet this requirement? (Choose two.)
  1. Amazon Simple Queue Service (Amazon SQS)
  2. AWS Budgets Correct Answer
  3. Cost Explorer
  4. Amazon CloudWatch Correct Answer
  5. AWS Cost and Usage Report

Key Takeaways

The question tests the difference between cost reporting and threshold-based alerting; the trap is choosing Cost Explorer because it displays cost data even though it does not itself send cost-threshold notifications.

AWS Budgets sends notifications when a defined cost or usage threshold is breached, and a CloudWatch billing alarm can notify when estimated charges cross a threshold. This page explains why those two services meet the requirement while Cost Explorer and the Cost and Usage Report only report or visualize costs.

Common mistake: Many candidates choose Cost Explorer because it shows and forecasts AWS spend, but it does not deliver threshold alerts on its own; Budgets or a CloudWatch billing alarm must be configured for notification.

Expert Analysis

Why the Answer Is Correct

AWS Budgets is purpose-built for cost and usage budgets: you define a threshold and configure alert notifications through email or Amazon SNS when actual or forecasted spend crosses it. Amazon CloudWatch complements this by publishing the EstimatedCharges billing metric, which can drive a CloudWatch alarm that sends an SNS notification when estimated charges exceed a chosen value. Both options therefore directly satisfy the requirement to receive a notification when a specific AWS cost threshold is reached, and the community answers from NayeraB, TheFivePips, and Dimagi consistently land on B and D for the same reasons. The official CloudWatch billing-alarm documentation and the AWS Budgets controls documentation linked by parrtner73 confirm these notification paths.

Why the Other Options Are Wrong

Amazon SQS is a message-queue service for decoupling applications; it has no cost-monitoring or threshold-alert capability, so A cannot fit. Cost Explorer is a visualization and forecasting tool—as Anyio noted, it can help you "SET ALARMS AND BUDGETS BASED ON PREDICTIONS (AND NOT THRESHOLDS!)"—but it does not by itself send cost-threshold notifications, which is why C is a distractor. AWS Cost and Usage Report publishes granular billing data to Amazon S3 for analysis, and as 3veryday summarized, these reporting tools "do not provide alarms for cost limits." Consequently, E provides data, not an alerting mechanism.

Community Comment Notes

Several learners (NayeraB, TheFivePips, Dimagi, and bn04) selected B and D and explained that Budgets handles threshold alerts while CloudWatch alarms can watch cost metrics. Anyio warned against Cost Explorer because forecasts are not thresholds, and 3veryday added that Cost Explorer and CUR are for viewing rather than alarm limits. parrtner73 supplied the two most useful official references: the CloudWatch estimated-charges monitoring page and the AWS Budgets controls page. GPFT and 3veryday's BE picks illustrate the common confusion with reporting services, but the explanations themselves confirm that CUR does not raise alarms.

Official Reference

These links open the official vendor documentation in a new tab.

Exam Strategy

When a CLF-C02 question asks for notification or alerting on cost thresholds, look for AWS Budgets and CloudWatch billing alarms, not reporting services. Cost Explorer and CUR are for analyzing and exporting cost data, so treat them as distractors unless the question specifically asks for visualization or detailed reports.

Frequently Asked Questions

Why is Cost Explorer not correct for cost threshold notifications?

Cost Explorer visualizes and forecasts spend, but it does not itself deliver threshold alarms; you must create a budget or CloudWatch alarm for notifications.

Does CloudWatch support billing alarms for AWS estimated charges?

Yes. The EstimatedCharges billing metric in the us-east-1 Region can drive a CloudWatch alarm that notifies through Amazon SNS when charges cross your threshold.

More CLF-C02 FAQ →

Discussion 23 contributions

Compiled from public community threads and reader submissions, lightly edited for clarity. Handles and vote tallies are shown as recorded, and comments reflect the views of individual contributors.

From public community threads 23

  1. TheFivePips 👍 12
    B. AWS Budgets: Allows the company to set custom cost and usage budgets that alert them when thresholds are exceeded. They can receive notifications via email or Amazon Simple Notification Service (Amazon SNS) when the budget thresholds are reached. D. Amazon CloudWatch: Can be used to create custom alarms based on cost metrics. The company can set up alarms to trigger notifications when specific cost thresholds are met or exceeded. CloudWatch Alarms can notify through various channels, including Amazon SNS. The other options are described as follows: A. Amazon Simple Queue Service (Amazon SQS): SQS is a fully managed message queuing service. C. Cost Explorer: Cost Explorer is a tool for exploring and analyzing AWS costs but does not provide direct notifications for cost thresholds. E. AWS Cost and Usage Report: The Cost and Usage Report provides detailed information about AWS costs but does not offer real-time notifications for cost thresholds.
  2. Anyio 👍 3
    COST EXPLORER IS WRONG! AWS Cost Explorer has an easy-to-use interface that lets you visualize, understand, and manage your AWS costs and usage over time. Create a cost and usage forecast for a future time range for your report. You can use a forecast to estimate your AWS bill and SET ALARMS AND BUDGETS BASED ON PREDICTIONS (AND NOT THRESHOLDS!).
  3. parrtner73 👍 2
    https://docs.aws.amazon.com/AmazonCloudWatch/latest/monitoring/monitor_estimated_charges_with_cloudwatch.html https://docs.aws.amazon.com/cost-management/latest/userguide/budgets-controls.html
  4. parrtner73 👍 2
    There is no SNS in the options, so the only option is to set the threshold on AWS Budgets and notifications via cloudwatch. Please correct me if I'm wrong.
  5. bn04 👍 2
    AWS Cost Explorer itself does not have built-in capabilities to send cost alerts or notifications directly.
Show 18 more comments
  1. GPFT 👍 2
    it is wrong
  2. Amin_013 👍 1
    B. AWS Budgets: AWS Budgets is a service that allows you to set custom cost and usage budgets for your AWS resources. You can configure a budget with a specific threshold and define actions, such as sending notifications, when that threshold is reached. D. Amazon CloudWatch: Amazon CloudWatch is a monitoring service that can be used to collect and track metrics, logs, and events from various AWS resources. It supports setting up alarms based on cost metrics, so you can create an alarm for a specific cost threshold and configure it to send notifications when the threshold is breached.
  3. Dimagi 👍 1
    Explanation B. AWS Budgets Allows you to set custom cost or usage thresholds. Can send notifications through Amazon SNS when actual or forecasted costs exceed a specified threshold. Example: Receive an email when your monthly AWS costs reach $500. D. Amazon CloudWatch Monitors metrics and can trigger alarms when configured thresholds are reached. AWS billing metrics can be monitored through CloudWatch after enabling billing alerts. Example: Trigger an alarm when estimated AWS charges exceed a configured amount.
  4. chalaka 👍 1
    B. AWS Budgets: Allows the company to set custom cost and usage budgets that alert them when thresholds are exceeded. They can receive notifications via email or Amazon Simple Notification Service (Amazon SNS) when the budget thresholds are reached. D. Amazon CloudWatch: Can be used to create custom alarms based on cost metrics. The company can set up alarms to trigger notifications when specific cost thresholds are met or exceeded. CloudWatch Alarms can notify through various channels, including Amazon SNS.
  5. Sir_Kay 👍 1
    A company wants to receive a notification when a specific AWS cost threshold is reached. Which AWS services or tools can the company use to meet this requirement? (Choose two.) A. Amazon Simple Queue Service (Amazon SQS) B. AWS Budgets C. Cost Explorer D. Amazon CloudWatch E. AWS Cost and Usage Report
  6. BryanNkala 👍 1
    Budgets allows you to set custom cost and usage and send alerts and notifications when a threshold is reached. CloudWatch monitors activities happening from AWS resources and sends alerts.
  7. Ailil 👍 1
    Answer is correct, you can create billing alarm in CloudWatch https://docs.aws.amazon.com/AmazonCloudWatch/latest/monitoring/monitor_estimated_charges_with_cloudwatch.html
  8. Passexam4sure_com 👍 1
    Using AWS Budgets, you can set a budget that alerts you when you exceed (or are forecasted to exceed) your budgeted cost or usage amount.
  9. 3veryday 👍 1
    Cost explorer or Cost and Usage Reports do not provide alarms for cost limits. They are just for viewing
  10. Sir_Kay 👍 1
    AWS Budgets allows setting and receiving notifications when specific cost thresholds are met.
  11. LNHP 👍 1
    AB https://docs.aws.amazon.com/cost-management/latest/userguide/budgets-sns-policy.html
  12. user1689 👍 1
    ref: The alarm triggers when your account billing exceeds the threshold you specify
  13. alanb1978 👍 1
    AWS Budgets and Amazon CloudWatch
  14. Anyio 👍 1
    The Correct answer is BD.
  15. lunamuller 👍 1
    Answers BD are Correct.
  16. Kostiantyn12 👍 1
    B and D correct
  17. asdfcdsxdfc 👍 1
    BD look correct
  18. LNHP 👍 1
    Sorry its BC

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