How to Set Up API Budget Alerts (and Why You Need Them Yesterday)

Why you need API budget alerts

Without alerts, you won't know about a cost spike until you check the dashboard — or worse, until the invoice arrives. A single runaway loop, a misconfigured prompt, or a traffic surge can burn through your monthly budget in hours.

Budget alerts act as an early warning system. They notify you the moment spend crosses a threshold, giving you time to investigate and fix the issue before it becomes expensive.

Types of alerts you should configure

Different alert types catch different problems. A good setup uses all three:

• Daily spend threshold — Triggers when a single day's spend exceeds a fixed amount (e.g., $50/day). Catches gradual increases and new features that cost more than expected.
• Spike detection — Triggers when spend jumps significantly compared to your recent average (e.g., 200% above normal). Catches sudden traffic surges, bugs, and abuse.
• Monthly budget warning — Triggers at percentage thresholds of your monthly budget (e.g., 50%, 80%, 100%). Prevents end-of-month surprises.

Where to send alerts

Alerts are only useful if the right people see them immediately. Configure multiple channels for redundancy:

• Email — Good for async notification and record-keeping. Every team member should get daily digest emails.
• Slack — Best for real-time team awareness. Send urgent alerts to a dedicated #api-costs channel.
• Webhooks — For automated responses. Trigger a webhook that pauses non-critical API calls when spend hits 90% of budget.

Setting up alerts in MeterFox

MeterFox supports all three alert types across email, Slack, and webhook channels. Here's how to set up a solid baseline:

• Set a daily threshold at 2x your average daily spend
• Enable spike detection at 200% above your 7-day rolling average
• Set monthly warnings at 50%, 80%, and 100% of your budget
• Route critical alerts (spikes, 100% budget) to Slack for immediate attention
• Send daily digests via email so the whole team stays informed

What to do when an alert fires

An alert is just the starting point. When one fires, follow this checklist:

• Check your cost dashboard for per-model breakdown — which model spiked?
• Check your application logs for unusual request patterns
• If it's a bug, fix it and consider adding rate limiting
• If it's legitimate growth, update your budget and alert thresholds
• Review whether you can route cheaper models for the workload that spiked

Key takeaways

Budget alerts are the cheapest insurance policy for your API spend. Set them up before you need them — by the time you realize costs are out of control, it's already too late to prevent the damage. Start with daily thresholds and monthly warnings, then fine-tune from there.