How do I set a budget for LLM API spending?
Estimate your usage
Count how many requests you expect per day and the average tokens per request (input + output). Multiply to get daily tokens, then multiply by 30 for monthly. For example, 1,000 requests/day at 500 tokens each = 500,000 tokens/day = 15 million tokens/month.
Check your provider's pricing page for input and output token rates. Output tokens often cost more. Multiply your monthly tokens by the rates to get a rough budget.
- Track average tokens per request
- Separate input and output token costs
- Add a 20–30% buffer for spikes
- Review usage weekly for the first month
Set limits and alerts
Most providers let you set a monthly spending cap. Use it. Also set email alerts at 50%, 80%, and 100% of your budget. If you have multiple projects, use separate API keys to track spending by project.
Consider a prepaid credit model if you want strict control. Some providers offer this; others bill monthly. If you're just starting, begin with a low cap and increase as you learn your actual usage.
Common mistakes
- Forgetting to include output token costs, which are often higher than input costs.
- Not setting a hard cap, leading to surprise bills from bugs or abuse.
- Underestimating usage growth as your app gains users.
