Enhancing Cost Transparency with AWS Secrets Manager Cost Allocation Tags

Overview

Organizations increasingly depend on various applications, databases, and third-party services in today’s cloud-driven world. Almost all of these systems require sensitive credentials such as API keys, database usernames, or authentication tokens. AWS Secrets Manager is designed to securely store, rotate, and manage these credentials without embedding them directly in application code.

This lack of visibility could complicate budget management, financial forecasting, and internal chargeback processes.

To address this, AWS introduced a new feature: cost allocation tags for AWS Secrets Manager. This enhancement brings a finer level of cost transparency, enabling organizations to assign expenses to specific teams or initiatives.

Introduction

Before diving into the details, let’s set the context for why cost allocation tags are valuable:

• Tags are metadata in the form of key-value pairs that can be applied to AWS resources. For example, you might have a tag like Environment=Production or CostCenter=Finance.
• These specific tags, activated in the Billing and Cost Management console, allow cost reports and AWS Cost Explorer to group and filter expenses based on those tag keys and values.
• Now, each secret can carry cost allocation tags, allowing an organization to assign costs more granularly.

For instance, a company running multiple workloads, such as HR applications, e-commerce platforms, and analytics systems, can assign a unique CostCenter tag to each set of secrets. When the bill arrives, finance teams can see how much each workload contributes to the AWS Secrets Manager cost.

Step-by-Step Guide to Using Cost Allocation Tags in AWS Secrets Manager

1. Prerequisites

Before implementing cost allocation tags, ensure the following:

• You have an active AWS account with access to Secrets Manager.
• You can use either the AWS Management Console or AWS CLI v2.
• Your organization has a tagging strategy (for example, consistent tag keys like Project, Owner, or Environment).
• One or more secrets have already been created in AWS Secrets Manager.

2. Adding Cost Allocation Tags to Secrets

Method A: Using the AWS Console

1. Open the AWS Secrets Manager console.
2. Choose the secret you want to tag.
3. Navigate to the Tags section and click Edit tags.
4. Add one or more key-value pairs. For example:
   • Environment: Production
   • Owner: AnalyticsTeam
5. Save the changes.

Method B: Using the AWS CLI

If you prefer automation, use the following command to add tags:

You can repeat the command for multiple secrets or multiple tags.

3. Activating Tags for Billing Reports

Adding tags alone is not enough, they must also be activated in the Billing and Cost Management console to appear in reports.

Console Steps

1. Open the Billing and Cost Management dashboard.
2. Navigate to Cost allocation tags.
3. Under User-defined cost allocation tags, find the tag key you created (e.g., Environment).
4. Select it and enable it.

CLI Command

Alternatively, run the following CLI command:

Note: It can take up to 24 hours for new tags to appear in the Billing console, and another 24 hours after activation for them to show in AWS Cost Explorer.

4. Viewing and Analyzing Costs

Once tags are active, you can analyze them in AWS Cost Explorer:

1. Open Cost Explorer in the AWS console.
2. Set your time range (e.g., last 30 days).
3. Select Group by → Tag, then choose the relevant tag key (e.g., CostCenter).
4. Filter results to show only Secrets Manager costs.

You will now see a breakdown of charges per tag value, for example, the Engineering team may account for $200, Finance $150, and QA $75.

This level of granularity allows organizations to:

• Understand which departments consume the most secrets.
• Justify expenses to internal stakeholders.
• Plan budgets with accurate cost attribution.

Best Practices for Using Cost Allocation Tags

• Define a Tagging Policy: Ensure your organization uses consistent tag keys and values across all teams. For example, always use CostCenter rather than mixing Cost_Center or CC.
• Automate Tagging: Use Infrastructure as Code (IaC) tools like Terraform or AWS CloudFormation to enforce tags automatically when secrets are created.
• Monitor Compliance: Periodically review secrets to confirm that required tags are applied. AWS Config rules or custom AWS Lambda scripts can help with this.
• Use Multiple Tags: Don’t rely on a single tag. Combine tags like Project, Environment, and Owner to gain multi-dimensional insights.

Conclusion

Introducing cost allocation tags in AWS Secrets Manager brings much-needed transparency to how organizations manage and attribute secret management costs. Instead of a lump sum, you can map expenses to specific projects, teams, or cost centers. This capability helps finance teams improve reporting and empowers technical teams to understand and optimize their cloud spend.

By carefully planning your tagging strategy and enabling cost allocation tags in Billing, you can transform Secrets Manager from a security tool into a service supporting financial accountability.

Drop a query if you have any questions regarding AWS Secrets Manager and we will get back to you quickly.

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