How to Plan Your 2026 Kubernetes Budget (Before Q1 Ends)
Most teams set their infrastructure budget based on last year's spend plus 20%. Here's why that's wrong, and what to do instead.
It's mid-January. Finance is asking for your 2026 infrastructure budget. You're about to do what everyone does: take last year's number, add 20% for "growth," and hope for the best.
That approach guarantees one of two outcomes: you'll either overspend (wasting budget that could go to headcount) or underspend (and spend Q4 begging for emergency funding). Neither is good for your career.
Here's a better approach based on actual data.
1Audit Your Current State (30 minutes)
Before forecasting, you need to know where you actually are. Not what you budgeted—what you're spending.
# Get current resource allocation across all namespaces kubectl top nodes kubectl top pods --all-namespaces --sum=true
Key numbers to capture:
- •Total allocated CPU/memory across all clusters
- •Actual utilization (the gap is your waste)
- •Node count and instance types by environment
- •Current monthly cloud bill for compute
Quick audit: Run brew install wozz && wozz to get a full waste analysis with dollar amounts in under 60 seconds.
2Calculate Your "True" Baseline
Your current spend isn't your baseline. Your optimized spend is.
If you're running at 30% utilization (typical), your true baseline is roughly 50% of current spend. The other 50% is waste you should eliminate before budgeting for growth.
| Metric | Current | Optimized |
|---|---|---|
| Monthly compute spend | $50,000 | $27,500 |
| Average utilization | 28% | 55% |
| Annual savings | — | $270,000 |
This is your "clean slate" number. Budget from here, not from your bloated current state.
3Factor in Planned Growth
Now add growth—but be specific. Generic "20% buffer" is how budgets balloon.
Talk to your product and engineering leads. Get concrete answers:
Translate answers into infrastructure requirements:
New ML pipeline (Q2): +$8,000/month EU region expansion (Q3): +$12,000/month Expected 40% traffic growth: +$11,000/month (optimized baseline × 0.4) ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Total growth budget: +$31,000/month = $372,000/year
4Build in Smart Buffers
You need a buffer, but not 20% across the board. Use tiered buffers based on predictability:
| Category | Buffer | Why |
|---|---|---|
| Existing stable services | 5% | Predictable, historical data available |
| New services (planned) | 15% | Some unknowns, but scoped |
| Experimental/R&D | 30% | High uncertainty |
| Emergency reserve | 10% of total | Unexpected incidents, scaling events |
Pro tip: Keep the emergency reserve in a separate line item. It's easier to defend and harder for others to raid for pet projects.
5Set Up Guardrails (Not Just Alerts)
A budget without enforcement is a suggestion. Set up automated guardrails:
PR-level cost checks
Block PRs that increase resource requests beyond thresholds. Catch cost increases before they merge.
Namespace quotas
Give each team a resource budget. When they hit 80%, they get alerts. At 100%, deployments fail.
Monthly reviews
Compare actual vs. budget monthly. Catch drift early, not in Q4 when it's too late.
- uses: WozzHQ/wozz@v1
with:
github-token: ${{ secrets.GITHUB_TOKEN }}
cost-threshold: 500 # Block PRs adding >$500/yearThe Budget Formula
2026 K8s Budget =
(Current Spend × Optimization Factor) // Your true baseline
+ (Planned Growth Requirements) // Specific, not generic
+ (Tiered Buffers by Category) // Risk-appropriate
+ (10% Emergency Reserve) // Separate line item
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Example:
($600K × 0.55) + $372K + $45K + $100K = $847K
vs. naive approach:
$600K × 1.2 = $720K (looks cheaper, but misses growth needs)
or: $600K × 1.4 = $840K (similar total, but no optimization = waste continues)Presenting to Finance
Finance doesn't care about pods and namespaces. They care about:
- ✓Total number (what's the ask?)
- ✓Comparison to last year (up or down?)
- ✓What it enables (business outcomes)
- ✓Risk if underfunded (what breaks?)
Lead with the optimization story. "We're reducing waste by $270K while supporting 40% growth" is much better than "we need 40% more budget."
Start With the Audit
You can't budget what you can't measure. Get your current waste numbers in 60 seconds:
brew tap WozzHQ/wozz && brew install wozz && wozz