Diabetic foot ulcer is a debilitating complication of long-standing diabetes mellitus. Patients lose their earning potential, face repeated hospitalizations, and are forced to bear heavy treatment costs. This places an enormous financial burden on the patients and their families. This study seeks to ascertain the out-of-pocket expenditure among these patients and correlate it with their risk factor profile. In this hospital-based cross-sectional study, a total of 154 patients with diabetic foot ulcers or amputations have been studied with an elaborate patient questionnaire and relevant clinical examinations. The costs incurred and the risk factors of the patients were analyzed for statistical association. The median total annual out-of-pocket expenditure for the management of diabetic foot ulcers among the study participants was found to be ₹29 775 (₹9650-₹81 120) ($378.14 [$122.56-$1030.22]). Out of the total expenditure, 58.49% went towards direct medical costs, 5.64% towards direct non-medical costs, and 35.88% for indirect costs. Medications, ulcer dressing and periodic debridement have accounted for 79.26% of direct medical costs. Transportation (61.37%) and patient's loss of income (89.45%) account for the major costs under the direct non-medical and indirect cost categories, respectively. A high ulcer grade and area, long ulcer duration, and past history of ulcers have higher expenditure. Patients seeking treatment from private establishments and those engaged in professional/skilled occupations have higher expenses. Adequate dressing of foot ulcers and proper footwear are associated with lower treatment expenditure. 68.8% of the participants have faced catastrophic expenditure due to treatment costs of diabetic foot ulcers. Adequate glycaemic control and proper foot care are necessary. Patients must seek medical care at the earliest in case of foot ulceration. Clinicians must provide proper wound care, institute effective antibiotics, and manage the complications. Government and insurance schemes are required to alleviate the patients' financial burden.