The Merseysiders have been busy in the transfer market this summer with Joe Cole, Christian Poulsen, Brad Jones, Danny Wilson, Milan Jovanovic, and Jonjo Shelvey all joining.
However, the ex-Fulham boss knows that with just one week left before the transfer window closes, the time left to strengthen is not the best period in which to splash the cash.
Hodgson does not believe he has fully assessed the talent and potential in the club's squad and academy and is against making a big-name signing if they already have a gem ready to be unearthed.
"I'd like some money to spend if I could research where that money could be spent wisely," said Hodgson.
"Giving me a lot now and telling me to go out and buy some players with one week of the transfer window left would not be particularly advantageous.
"I've only been here for five weeks or so and I'd want to make sure I had assessed absolutely everyone, including those at the academy, just in case we have an outstanding 17-year-old.
"We might have a Javier Hernandez there so I don't want to go out and spend £50million on buying another one."