I'm certainly not going to advocate lavish spending, but this is fudging the budget situation a little.
What we can "afford" is relative to how we dress up our budget. You said that the club budgets to finish 18th (and I think the club have said that previously too). On the face of it, that prudence looks extremely sensible. However, that misses the point that the difference between budgeting, say, 19th instead of 18th is negligible, as is the difference between budgeting 17th instead of 16th. But the difference between budgeting for 17th instead of 18th is, literally, millions. If not tens of millions. So by changing our budget to 17th, we would all of a sudden be able to "afford" a lot more.
That's the difference between a major signing or not.
So while budgeting for 18th and finishing 18th means we will be prudent, if budgeting for 18th means we will struggle to finish higher than 18th, that's not actually all that sensible, i.e. if budgeting for 17th would give us a much better chance of staying up.
I'm not saying the club is doing the wrong thing (though on the face of it I doubt other clubs are budgeting for 18th based on transfers so far), I'm just saying that it's not necessarily the case of "budgeting for 18th = prudent, budgeting for 17th = lavish, risky and dangerous" given that the significant gulf in respective budgets might have a very big impact on our chances of staying up (and therefore hedge against the risks of 17th).