The Cost Optimization Hierarchy#

Cloud cost optimization follows a hierarchy of impact. Work from the top down – fixing the wrong tier of commitment discount matters far less than shutting down resources nobody uses.

1. Eliminate waste – turn off unused resources, delete orphaned storage
2. Right-size – match instance sizes to actual usage
3. Use commitment discounts – reserved instances, savings plans, CUDs
4. Shift to spot/preemptible – for fault-tolerant workloads
5. Optimize storage and network – tiering, transfer patterns, caching
6. Architect for cost – serverless, auto-scaling, multi-region strategy

Eliminating Waste#

The fastest cost reduction comes from finding resources that serve no purpose. Every cloud provider accumulates these: instances left running after a test, snapshots from decommissioned servers, load balancers with no backends, unattached disks.

Terraform Cost Management#

The most expensive line in your cloud bill was written in a .tf file. A single instance_type choice, a forgotten NAT Gateway, or an over-provisioned RDS instance can cost thousands per month — and none of these show up in terraform plan. Plan shows what changes. It does not show what it costs.

This article covers how to write cost-aware Terraform and catch expensive decisions before they reach production.