Opinions - time for a new computer?  need more RAM, Time Machine back up full - get new computer?

I am in a quandary.  My early 2008 iMac needs more Ram.  I could upgrade from 2gb to 4gb for around $60.  My 1T external hard drive for Time Machine is full and I do not relish the idea of it erasing old data if I continue to use it this way, but then I am shelling out more money for a new hard drive.  Can get new 3T hd for about $200.  Is it worth it to shore up my computer?  I have recently upgraded OS to ML and it is really starting to act sluggish.  I hate the idea of having to transfer everything over to a new Mac and therefore new OS.   I need a working computer every day for business for my husband, so it would be impossible to go without a computer while things are being transferred over - and how long would it take for me to do that.  Plus, will files and photos be transferred over exactly as I have organized them?  I have spent a lot of time organizing bookmark folders in Safari, mailboxes in Mail and albums and folders in iPhoto.  Don't want to start from scratch again.   Also don't like the idea that the new iMacs don't have a slot for dvds and cds, playing and burning.  I do a lot of this kind of thing.  So then I would need to buy a separate thing for doing this as well as the computer itself.  Have wondered how many things have changed from ML to Maverick.  Another big learning curve???
Would really appreciate any thoughts and opinions.  I am a senior citizen and don't know how to sort through this.  One thing I think about is that I don't know how much longer I will be living and able to do computer work. I know everything is a risk, but would like some advice even if it is only an opinion.

It's probably time for a new machine. You won't have to start from scratch. Migration Assistant will bring over all of your data and apps (some may need to be re-activated using product keys). Depending on how much you actually have, a few hours should be all it takes over Ethernet.
Time Machine should continually erase the oldest backups when it needs space for new ones.
You might want to do both. Upgrade the RAM in the old machine to the max it will take, and buy a new machine as well. If your husband really needs a machine available all the time for business, having a 'spare' is a good thing.
Check out what's available in the refurb store. They are virtually indistinguishable from new retail stock and come with a full warranty. You can save hundreds.
http://store.apple.com/us/browse/home/specialdeals/mac

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