The Hidden Costs of Budget Web Hosting

Shared web hosting comes with a great price tag, but is it right for your business? Learn more about how web hosting works and why a budget host may not be right for your site.

When I create a proposal for a new client, almost everything is negotiable. We always provide options at multiple price points, and my studio can offer flexible payment terms to help nonprofits and seasonal businesses afford our services.

But when it comes to hosting, clients are sometimes surprised by the prices we quote.

Advertisements for budget web hosting are everywhere online. Some providers quote absurdly low introductory prices as low as $1 per month. It's created an expectation in many people that hosting should cost a few dollars per month, and anything more would be overpaying for an otherwise inexpensive service.

As with many other things in life, there's truth in the idea that "you get what you pay for." In the decade that I have been a professional web developer, I've seen many people get burned by cheap shared hosting that ends up hurting their business.

In this post, I'll explain why going with a budget host can have huge hidden costs for your business. We will also explore the different considerations that go into selecting a provider and a hosting plan and what you should expect to pay.

How Does Web Hosting Work?

To understand budget hosting and its limitations, it's necessary to understand how web hosting works in the first place.

Every time someone types your domain name into a web browser, they are asking a physical computer that is hosting your site for a copy of it.

For a simple website, that means the computer just needs to fetch a bit of data and send it back. For more complex situations, like web applications or sites based on a content management system (e.g., WordPress), the computer has to generate a web page on the fly based on the data the visitor's browser is requesting.

Choosing the right hosting solution for your website boils down to figuring out what level of resources your site needs to function quickly and efficiently.

Hosting Options

There are thousands of different web hosts out there, all offering individual packages and pricing tiers. But regardless of what company you go with, hosting plans tend to fall into one of four categories.

Shared Hosting

Shared hosting is the cheapest and most basic option. If you've ever seen a major hosting company advertising monthly prices in the $1 to $10 range, this is what they're selling.

Your website is hosted on large, shared servers along with hundreds or thousands of others. You'll be able to make changes to your website but not the underlying configuration of the server. This typically isn't a problem for simple sites, but if you need to run more complex applications on the server-side, there can be problems.

The price of a shared hosting plan is hard to beat, and for a personal site that doesn't get a lot of traffic, it may be all you need. On the other hand, shared hosting has a massive list of downsides:

  • Your site will be sluggish because it only has access to a very limited amount of computer resources
  • If someone else's site on the server gets inundated with traffic, your site may slow down or become unresponsive
  • You are limited to using software and plugins that don't need to alter the configuration of your server
  • The server you're on will frequently use older versions of important software, introducing security vulnerabilities
  • If an attacker can gain control over an entire server it can put every site hosted on it in jeopardy
  • Technical support is limited and can take a long time to fix problems

The unreliability of shared hosting, coupled with security risks and poor service, makes it a poor choice for anyone with a serious business.

Any time your site is extremely slow or offline, you are potentially losing business; doubly so for e-commerce sites, where even a bit of downtime can directly cost you sales. Shared hosting holds your business back by making it hard to add features to your site down the road. Finally, the security risks are unacceptable for any business that collects customer data.

Dedicated Hosting

Dedicated hosting is the most expensive option. A dedicated server—also known as a bare-metal host—is a physical computer in a data center that is set aside for your use. You have complete control over the machine, including the ability to shut it down and restart it.

Dedicated servers are usually used for intensive, round-the-clock applications like gaming or machine learning. They have enough power to host dozens of normal websites. You are the only one who has access to the machine's resources, so a dedicated server can handle large spikes in traffic. Dedicated servers can be very expensive, however, starting at $70 per month and going up from there.

Virtual Private Server (VPS) Hosting

Virtual private servers (VPSes) can be thought of as a middle way between shared and dedicated hosting. In a VPS environment, many different servers are grouped together using complex software that partitions the server cluster's shared resources. Each VPS gets a certain amount of guaranteed access to the cluster's computing power and memory.

VPSes function a lot like dedicated servers. You have full control over the server and the software that goes on it. Virtual private servers from reputable cloud providers like Digital Ocean, Linode, and AWS boast fast speeds and great uptime guarantees and are trusted by many of the world's largest companies.

Since you only pay for the level of resources you ask for, you can fine-tune your setup so you aren't wasting money. For an average WordPress-based website, a $15 to $20 VPS with the proper system resources is more than adequate.

The price for this level of control is that you are entirely responsible for keeping your server secure and up-to-date. This means remotely logging into your server and using the command line to run upgrades. But for the vast majority of people, a VPS makes more sense than either shared or dedicated hosting.

Serverless Hosting

The newest option for hosting is known as serverless hosting. The name is a bit of a misnomer, as sites are still located on a cluster of servers. Instead of splitting up the server cluster into virtual servers, however, the cluster itself provides your site with the resources it needs at any given time. If no one is visiting your site, it takes up very few resources. If you get a spike in traffic, you're covered, because you'll be allocated the computing power you need right on the spot.

Serverless hosting is an advanced option that is usually only suitable if you have a web developer on your team who can configure it properly. That said, it can be an extremely fast, secure, and powerful hosting option that can cost very little to implement. Netlify's free tier is more than enough for most static websites.

Managed vs. Unmanaged Hosting

As you've seen, shared hosting is probably the wrong choice for your business website. But this begs a further question—is hosting something you want to manage yourself at all?

Do-it-yourself hosting (unmanaged hosting) is best attempted if you're technically skilled, have experience with the Linux command line, and web server security. If you prefer a graphical frontend to help you with important tasks, you can use a web server administration tool like Ploi (our favorite) or cPanel. You can save a lot of money managing a VPS on your own. If your website processes sensitive user data or allows user accounts, however, the cost savings might not be worth the added hassle if someone breaches your site.

We recommend managed hosting to virtually all of our clients. With managed hosting, real human beings manage your website's server for you, taking care of configuring settings, setting backups, running security updates, and making sure your site is always online. You only have to worry about updating your site.

Managed hosting greatly reduces the possibility that you can do anything that will "break" your site. Many managed hosting providers also provide technical support that goes above and beyond what you'd get from a shared, unmanaged host, just in case you ever do run into trouble.

Most reputable web development and digital marketing agencies—like 45° North Creative—offer managed hosting. If you are looking for a great solo solution, WPEngine offers top-notch managed hosting for WordPress sites.

Website Maintenance Packages

As we've seen, most small and midsized businesses benefit from managed VPS hosting. It offers the best tradeoff between server power and price, along with the peace of mind that comes from knowing your server is being actively patched, maintained, and backed up.

There's one more dimension we need to explore, though, and that's website updates.

If you've ever used a drag-and-drop website builder (like Wix, Weebly, or a multipurpose WordPress theme), you know that it's easy to make tiny mistakes that can negatively affect the look of your site. It's even possible to break your site's design completely, forcing you to waste valuable time reverting to an earlier backup and correcting things.

Most of the time, what you want to do is make small updates to your site, like changing the availability of a product or adding a notice about a change in your business hours. You may also want to make small stylistic changes that don't rise to the level of a full redesign.

That's why many web development and digital marketing studios are starting to offer website maintenance packages. For a flat fee, you get hosting, technical support, and a certain amount of free website updates each month.

Outsourcing your website maintenance means that things will be done right the first time, and your customers will never have to see a broken or offline site because of a mistake. Stylistic changes that would take hours to make on your own can be accomplished in minutes by an experienced web developer who understands how to modify the underlying code.

How Much Should Hosting Cost?

So, in the end, what's a fair price to charge for hosting a website?

If you're still determined to go with a shared host, don't spend more than $10 per month on your hosting plan, and be sure to read the fine print when it comes to "unlimited" storage and bandwidth.

Do-it-yourself VPS hosting should set you back anywhere between $10 to $30 per month for a normal business website. It's worth it to pay a little extra for server backups. Adding a server administration tool like Ploi will cost an additional $10 to $16 per month for a paid plan, depending on options.

There's a wide range of prices for managed VPS hosting. For a WordPress site, expect to pay around $25 per month on the low end and $70 per month on the high end. Higher-end options include additional resources for things like e-commerce sites, which require more processing power, along with additional layers of security monitoring.

Website maintenance or website management services typically cost between $50 per month and $150 per month in addition to your hosting costs. Be sure you understand what is included in your plan and what isn't.

For what it's worth, our Digital Business Support packages start at $149 per month and include managed VPS hosting, free access to advanced analytics tools, a monthly SEO review, and unlimited minor site edits.


Choosing a good web host and the right hosting plan is an essential part of running your website. Putting up with a budget host might save you some money in the short run, but you'll pay for it with slow speeds, downtime, security issues, and lost business.

Going with a quality provider gives you the peace of mind that comes with knowing that your site will be up and running whenever your customers want to access it and that if you ever experience problems, a team of web professionals will have your back.

Published Nov 25, 2021

By Dylan Tanner