Here's a horror story: A friend built a simple app, left it running for a month, and got a $400 bill from AWS. Why? A runaway database query hit their API 10 million times. They had no monitoring, no alerts, and no idea until the bill arrived.
The good news? With the right setup, you can run an app serving hundreds of users for $0-20/month. The trick is knowing your limits, watching your usage, and having a plan BEFORE you hit paid tiers.
LLM Conversation Starter
Get a personalized cost analysis for your stack:
My current stack: - Hosting: [e.g., Vercel] - Database: [e.g., Neon PostgreSQL] - File storage: [e.g., Vercel Blob] - Authentication: [e.g., NextAuth] - Payments: [e.g., Stripe] Expected usage: - Users: [estimate] - DB queries per user per day: [estimate] - File uploads per month: [estimate] Help me: 1. Calculate my monthly costs at current usage 2. Identify which free tier I'll hit first 3. Suggest cost-saving alternatives 4. Create alerts before I get charged 5. Plan for scaling to 1,000 users
Pro Tip:
Save this analysis. Update it monthly as your usage grows.
Free Tier Tracking (Know Your Limits)
Every service has generous free tiers. The key is knowing exactly where those limits are and monitoring your usage BEFORE you hit them.
Vercel (Hosting)
Free Tier:
- • 100GB bandwidth/month
- • 6,000 build minutes/month
- • Unlimited deployments
- • 100GB-hours serverless functions
Watch Out For:
- • High-traffic pages eating bandwidth
- • Large images (optimize them!)
- • Serverless functions running long
Check usage: Vercel Dashboard → Analytics → Usage
Neon (Database)
Free Tier:
- • 0.5 GB storage
- • 191 hours/month compute
- • 3 GB data transfer/month
Watch Out For:
- • Storing base64 images (huge!)
- • Inefficient queries
- • Not cleaning up test data
Check usage: Neon Console → Project → Usage
Stripe (Payments)
Pricing:
- • 2.9% + $0.30 per transaction
- • No monthly fee
- • Test mode is totally free
Watch Out For:
- • Failed payment attempts (still charged)
- • Currency conversion fees
- • Dispute fees ($15 each)
Good news: You only pay when you make money!
Cost Alert: The 80% Rule
The mistake: Hitting 100% of free tier and suddenly paying $20/month.
The fix: When you hit 80% of ANY free tier limit:
- 1. Pause and investigate WHY usage spiked
- 2. Optimize before spending money
- 3. Decide: upgrade or find alternatives?
Set calendar reminders: Check usage first Monday of every month.
Graduation Strategy (When Free Isn't Enough)
Eventually, you'll outgrow free tiers. This is GOOD - it means people are using your app! But don't panic-pay for upgrades. Have a strategy.
The Graduation Decision Tree
If you're making money (revenue > $100/month):
→ Upgrade immediately. A $20/month database is nothing if you're making $500/month.
If you're not making money yet:
→ Optimize first. Can you reduce usage? Archive old data? Improve queries?
If optimization doesn't work:
→ Consider alternatives. Switch to different provider? Sunset unused features?
Typical Cost Progression
Hidden Costs (The Sneaky Ones)
Some costs don't show up as line items but they're real money:
The "Free Trial" Trap
Some services give you $200 credit... then auto-charge your card when it runs out.
Fix: Set calendar alerts before trials expire. Cancel or downgrade BEFORE they bill you.
The Zombie Resource
Old test databases, staging environments, forgotten S3 buckets - all costing you monthly.
Fix: Audit all services quarterly. Delete what you're not using.
The Integration Tax
Each new service adds complexity and potential costs. Email service + analytics + monitoring = $$$
Fix: Only add services when absolutely necessary. Free tier stack first.
The Success Penalty
Your app goes viral. Suddenly 10,000 users hit your API. Your bill is $1,000. Joy and panic.
Fix: Set hard usage limits in dashboards. Cap at free tier until you're ready.
Cost Optimization Tactics
1. Cache Everything You Can
Every database query costs compute time. Cache results for 5 minutes and you'll reduce database load by 90% for popular pages.
Ask your LLM:
"Add caching to my API routes that fetch [describe data]. Cache for 5 minutes."
2. Optimize Images Aggressively
Images are bandwidth killers. Use Next.js Image component - it auto-optimizes and serves WebP format.
- • Never upload images larger than 1MB
- • Use lazy loading for images below fold
- • Compress with tools like TinyPNG first
3. Archive Old Data
Database size = cost. Do you really need login logs from 2 years ago?
- • Archive data older than 6 months to cheaper storage
- • Delete test/development data regularly
- • Use database indexes for faster queries
PM Insight: Revenue-First Optimization
Amateur move: Spending 20 hours optimizing to save $5/month.
PM approach: Spend those 20 hours building features that make $100/month. Then happily pay for the upgraded tier.
Rule: Only optimize costs if:
- 1. Costs exceed 30% of revenue, OR
- 2. You're pre-revenue and costs exceed $50/month, OR
- 3. There's an obvious inefficiency (like storing videos in database)
Monthly Cost Monitoring Checklist
Do this on the 1st of every month (15 minutes):
Budget Goal for First Year:
Stay under $20/month until you're making $100/month. Then scale costs with revenue.