Ms Reeves’s intervention comes amid tensions over how to pay for the Government’s delayed defence investment plan.
Downing Street has reportedly ordered Whitehall departments to find spending cuts to help pay for an additional £15bn of spending in the next four years.
However, this remains far short of the £28bn demanded by army chiefs.
The defence investment plan is expected to be published as soon as this week, before a Nato summit in July. The plan was originally expected last autumn.
The negotiations have caused a bitter Cabinet row between the Ministry of Defence, the Treasury and No 10 about how much money is needed to ensure Britain’s defences remain fit for purpose.
Ms Reeves said: “The first duty of the Government is to keep its people safe, and in the world in which we live today, it’s increasingly clear that the US and other European countries are going to have to spend more on defence, but crucially spend that money better.
“The money has to come from somewhere, and borrowing cannot always be the answer.”
Ms Reeves signalled that raising defence spending beyond the 2.6pc of GDP pencilled in next year meant other priorities had to be squeezed, including help for first-time buyers to get on the housing ladder.
Asked if Labour had planned to revive George Osborne’s Help to Buy scheme that helped families with small deposits to get on the housing ladder, the Chancellor said: “If defence is the number one priority, and we live in a dangerous world, that means you can’t make commitments everywhere, because then you end up in the position that previous governments have ended up in, where you over-commit, and then you under-deliver, and you end up with high interest rates.”