You didn't buy this from apple or from an authorized Apple reseller. It is old out of date technology. That said, you can still go use you iPhone 3G with iTunes and the appstore, just don't expect the new or updated apps to work with your model.
I happen to still have the iPhone 3G that was handed down to me by my boss. It still does most of the things I want it to do. Web interaction and facebook specifically are spotty at best. Basically the newer the code on the web page your trying to use, the more likely it will give you some problems. I use my iPhone basically as a glorified iPod Touch since I don't use it as a phone (I have a different phone).
Since I am on a tight budget as well, some time this year I will be replacing my iPhone 3G with a brand new iPod Touch 5 for around 229$ American (might be able to get a slightly better deal on amazon).
I have this advice for ANYONE buying an iPod Touch or an iPhone or an iPod on a budget:
Buy the CHEAPEST NEW ONE you can afford!!!
I can not emphasize this enough. With a new iProduct you get a 1 year warranty, access to the newest apps, and perhaps more importantly, A NEW BATTERY. Use iPod and their like are so often sold with partially or even mostly depleted battery life. You might get lucky with a used one (I did when I bought a iPod 2 for my daughter) but more times than not, you are getting partially or mostly used up old stuff. If you buy used and have to replace the battery you will end up spending what you would have on a new one.
The market for used iPods iPhones and iPads is very overpriced.
If you buy a used old one you will have less battery life and the compatibility issues that started this thread.
Don't waste your money, buy new and get the most life out of it you can.