In the United States, rising health care costs have led to discussion about bending the cost curve. To understand the true burden of disease and its treatment, costs of care, including those incurred by patients and their families, must be comprehensively assessed using psychometrically sound instruments. The Resource Utilization Questionnaire (RUQ) is a 21-item self-report questionnaire first developed to measure the costs incurred by families of infants who had required intensive care during the newborn period. The purpose of this article is to describe the conceptualization of resource utilization and costs and other methodological issues in conducting economic analyses, the process of adapting the RUQ for use in children and families with Type 1 diabetes mellitus (T1DM), and the psychometric evaluation to establish content and criterion validity of the instrument. The finalized modified RUQ for T1DM (mRUQ-T1DM) contained 25 items reflecting direct (5 items) and nondirect (3 items) health care, patient/family time (8 items), and patient/family productivity (9 items) costs using a 3-month recall. The mRUQ-T1DM validly measures cost incurred by children and families with T1DM and is easily completed by parents. Furthermore, the mRUQ-T1DM may be adapted for use in other populations using a similar process.