Tagging Best Practices


AWS Cost Management: Tagging

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Costs in cloud environments can get complicated quickly. Therefore it is essential to provide transparency and responsibility to everyone in a business. Hence, in this course, we will take a look at tagging in AWS in general and other best practices in the context of cost optimization in AWS.

Learning Objectives

  • Understand what tagging is in AWS and learn about its benefits
  • Learn about the best practices for tagging
  • Learn about AWS-generated cost allocation tags

Intended Audience

This course is ideal for anyone looking to optimize costs within their AWS environment.


To get the most out of this course, you should have a basic knowledge of cost optimization in theory, cloud- and finance-related terminology, and the AWS platform.


We've picked a few best practice examples for you to apply for your business or organization. Let's start with some common tags that are used by most organizations. Of course, these are just some ideas and you need to use tags that fit your business case. Some common examples include Cost Center or Business Unit tag, used to show where resource costs are allocated within the organization, and it also allows correct cost allocation within billing data.

Service/Workload name tag. This shows which service the resource belongs to. Resource Owner tag. This is responsible for the resource. Simple Resource Name tag. This is something easier to read and to remember than the default tags. And Environment tag. It determines the cost difference between different environments. For example, dev, test/stage, production. Check your cloud and see whether these tags can help you get started with tagging. Also make sure to check AWS pre-generated tags. They might save you some time.

Now let's look at some tagging best practices. So, number one, align tags to your cost allocation strategy. Before you start tagging, you should think of a general cost management strategy. Think of tags that help you to track and allocate expenses and make those tags align with your strategy. Next, tag everything. Tag as many resources as possible so that no resource is left untagged. Make this a rule. In fact, you can roll out policies in your cloud environment that will forbid launching resources without tags.

Next, find a purpose for each tag. Think of a certain use case before adding a tag. Otherwise you will have a hard time justifying your tags and you risk running into a mess of baseless tags. That now leads me onto the next point. Limit the number of tags you adopt. Find redundancies and overlapping tags and simplify them. There's no point in releasing multiple tags that cover the same subject. Look for tags that might logically overlap. See where you might merge them and reduce the number of your overall tags. And keep it manageable. Obviously, the more tags you have, the more tags you have to deal with. Keep the number as low as necessary, but the information value as high as possible.

Next, consistency is key. Use a consistent naming convention. This helps to keep an overview and eases further processing. Giving your tags less abstract names, and instead naming them with descriptive terms also makes them easier to read. Automate tag management. Make use of tools like the AWS tag editor to automate your tagging. Avoid wasting time on repetitive tasks and use automation as much as possible. Set up policies to forbid launching untagged resources. This is an easy way to ensure that no new resources are slipping into your environment without a tag.

And finally, audit and maintain your tags. Make it a habit to review tags from time to time and verify their purpose. Tag maintenance is essential and should involve everyone on the team. So make it a recurring task for everyone and have everyone keep their eyes open for suggestions for improvement.

About the Author
Heinrich Marks
FinOps Consultant

Heinrich Marks and is a FinOps Consultant at kreuzwerker Frankfurt GmbH, Germany. His expertise lies in AWS cost optimization and FinOps methodology at the enterprise level. 
At kreuzwerker, we focus on AWS, Software Engineering, and Cloud Financial Management. We've faced many cases with our customers where costs in the cloud got out of hand and lost touch with the actual business values. This made us work harder on solutions and find ways to master financial management in the cloud. 
Over time, we have already been able to save our customers many millions of dollars. Moreover, we are also proud partners of the FinOps Foundation and the leading professionals in Germany. Today, we want to share this knowledge with you and spread more awareness on the topic!