Terraform Best Practices: Lessons from Real-World Team Projects

Learning Terraform the Hard Way

I've made most of the Terraform mistakes so you don't have to. Corrupted state files at 2 AM, modules that nobody could understand, CI/CD pipelines that deployed to production when they shouldn't have.

These practices come from fixing those mistakes.

Project Structure That Scales

The Monolith Trap

Many teams start with everything in one file. This works until you have 50+ resources, then it becomes unmanageable.

Better: Environment Separation

terraform/
├── environments/
│   ├── dev/
│   ├── staging/
│   └── prod/
├── modules/
│   ├── networking/
│   ├── compute/
│   └── database/
└── global/
    ├── iam/
    └── dns/

Each environment has its own state file. Changes to dev can't accidentally affect prod.

Module Design

Good modules are:

• Single purpose: One module, one job
• Configurable: Expose what needs to vary
• Documented: README with examples
• Versioned: Tag releases

State Management

Remote State is Non-Negotiable

Local state files cause team conflicts, no locking, and no backup. Use remote backends like S3 with DynamoDB for AWS, or Azure Storage for Azure.

State File Security

Your state file contains sensitive data:

• Enable encryption at rest
• Restrict access to state bucket
• Enable versioning for recovery
• Never commit state to Git

Writing Better Terraform Code

Use Variables Wisely

Don't hardcode values. Use variables with descriptions, defaults, and validation rules.

Data Sources Over Hardcoding

Look up values dynamically instead of hardcoding AMI IDs or other values that change.

Meaningful Resource Names

"sg1" tells you nothing. "web_app_alb_security_group" tells you everything.

CI/CD for Terraform

Basic Pipeline

1. Validate and format check on all branches
2. Plan on pull requests
3. Apply on main with required approval

Security Scanning

Add tfsec and Checkov to catch security issues before deployment.

Common Mistakes

1. Ignoring Drift

Run terraform plan regularly to detect manual changes.

2. Not Using Workspaces Correctly

Workspaces are for temporary variations, not environments.

3. Storing Secrets in Variables

Never put secrets in code. Fetch from secret managers at runtime.

4. Massive Blast Radius

If one terraform apply can break everything, split into smaller configurations.

Quick Reference: Team Guidelines