Guardiola was asked after a competitive 3-1 win at Everton whether he needed to make more signings in January.
He responded by saying that he was happy with the quality and numbers in his squad.
But Neville disagrees, and thinks Guardiola knows the truth.
"You have to think that City will spend in January," the former Manchester United man told Sky Sports.
"I saw this morning that Guardiola said they didn't have any money. Well, they've got more than everybody else.
"They bought Aymeric Laporte in January a year and a half ago, and I feel they're going to have to do the same again.
"This won't be good enough for the Champions League or the Premier League. Guardiola will know it, he knows the standard more than anybody."