The Cottagers finished seventh last term but Hodgson is adamant that ensuring the club's solvency is more important than moving up the table.
Hodgson, whose side are currently in 10th spot, said: "The club's existence is more important than short-term gain. It would be unwise of me to say that we should try to break into that top six by breaking the bank."
The 62-year old coach pointed to Portsmouth's situation as an example of what can happen if a club overstretches itself.
Pompey, nine points adrift at the bottom of the table, look almost certain to be relegated to the Championship after being docked nine points for going into administration.
"You have the short-term gain of Portsmouth winning the FA Cup (in 2008) which is really something that after years of moving between the top two divisions they thought maybe was beyond them, " added Hodgson.
"But when you see what happens as a result of it, with the club going into administration, that would bother me more than hoping or believing that Fulham could stay in the Premier League for years to come.
"The amount of money that the top teams are spending increases every year - not just the transfer fees but also wages.
"I know the chairman (Mohamed Al Fayed) has done an article this week that in his view clubs should not really be living beyond their means and clubs should not be depending on sugar daddies in order to survive."
Al Fayed told the Daily Express that he had spent £280m since buying Fulham for £30m 13 years ago.
The Egyptian said Manchester City were "the worst for the game" and that their big-spending ways could drive other clubs to extinction.
"Seventy five percent of the clubs, they are begging and borrowing. There won't be enough clubs left if this continues to happen," said Al Fayed.
"I totally agree with that philosophy as well," continued Hodgson, who has secured Fulham's top-flight status for next term while also guiding to the last eight of the Europa League.
"The teams in that top six have a massive advantage over Fulham, and that is that they have a capacity of 60-70,000 whereas we have 23,000."
Al Fayed took over at Fulham in the summer of 1997 and has bankrolled the west London club through the big spending managerial eras of Kevin Keegan, Jean Tigana and Lawrie Sanchez.
But the arrival of Hodgson in December 2007 and a miraculous escape from relegation seemed to bring about a switch to acting with greater financial responsibility.
However, Al Fayed has not been afraid to support Hodgson in the transfer market with the club spending a reported £12m on striker Andrew Johnson in the summer of 2008.
Source: BBC Sport
Source: BBC Sport