How can you insert test data if callouts after DML statements are not allowed?

Inserting test data before the Test.startTest method is the correct approach due to the way Salesforce manages DML operations and callouts in the context of testing.

When running tests in Salesforce, any DML operations (like inserting, updating, or deleting records) that occur after a callout are not executed until the callout is finished. This means that if you need to make a callout as part of a test, any DML statements following that callout will not execute as intended.

By inserting test data before invoking the Test.startTest method, you ensure that the necessary data is in place for your test to function correctly when the callout occurs. This positioning allows for the assertion of data manipulation within your test not to conflict with any callout processes that might follow.

In contrast, inserting test data during or after the callout is ineffective because the Governor Limits will restrict the execution of DML statements after a callout has been made. Additionally, performing DML operations during Test.stopTest would also not produce the expected results since the test context has already shifted to finalizing the test outcomes.