If you really want to slash your costs on AWS, consider spinning up spot instances as shown in this thread. I’ve been paying $0.15-0.20 per hour instead of $0.90 for on-demand instances. You can also dispense with the elastic IP if you find you don’t need it and want to pay less.
Also note that you’ll need to use a different AMI when setting up your EC2 instance with a smaller EBS size. If you do a search in this forum you should be able to find some more info on the topic.