It is often used in situations where someone is reluctant to pay, or feels like they are being forced to pay more than they want to.
Here are some examples:
* "I'm going to have to shell out a lot of money to fix my car."
* "They shelled out a fortune for that new house."
* "I'm not going to shell out for that concert ticket."
The idiom likely comes from the idea of "shelling out" coins, as if you were emptying a shell full of them.