They've spent a fortune for a number of years. Arsenal are probably even better than Liverpool at playing the poverty card. They've thrown more cash around than anyone, just on absolute shite. Yet I heard someone talk about how cheap their front three was the other day, and what excellent investments they've made. Ignore Pepe, Ozil, Aubameyang etc.
Arteta is turning things around with solid investments and has turned players like Xhaka around ("players like" because he's literally the only one).
Ultimately the squad isn't good enough to compete on all fronts. They're going to be in the CL next season so they need to improve further, and you might as well go for it this window when you're top of the league. If City hadn't won it for 20 years and had some cash, we'd want the same if there were obvious weaknesses in the squad. Even if it doesn't pay off this season, their investments are longer term.
It's also a good time to strike because players out there will see that PL winners medal and probably be all over that move.