Dave_2 :
I will need to run a benchmark, but I know for sure I need to upgrade my RAM. I will be running games that recommend 8gb, while some recommend 12 but it isn't a necessity. So, I am unsure if I should go all out "future proof" with the RAM and get 16gb or compromise with 8 to save money for elsewhere.
Without mention in your OP of gaming, your GPU or what games you play. I'd have no idea about your use of the system and just have to assume general purpose.
If you have a good GPU. The next logical step would be an i7. Either an i7-4770K or i7-4790K. As either will allow you to overclock. While some games benefit with more than 8GB RAM. A greater percentage benefit from the higher clock rate you can achieve from the overclocked i7. Some will also benefit from the increased number of threads of the i7.
As for buying a CPU. You need to decide between new and used. CPU have a failure rate of less than 1% per year. Given that. The odds of a new CPU or used CPU lasting over 10 years before failure are nearly identical.
As the system is already used. I'd recommend saving money and buying a used CPU off eBay. You get very good buyer protection from eBay and Paypal. As long as it works when it arrives. It should still work long after it is incredibly obsolete. Your motherboard or PSU will likely fail long before the CPU. If it doesn't work. You get a refund.
Then I'd take the suggestion of selling the old CPU. Use that money to upgrade the RAM. If you buy used RAM off eBay. Be sure it is not ECC memory. There is a lot of cheap ECC memory on eBay. Your motherboard does not officially support ECC memory.
That being said. There is one module in the memory support list which is ECC made by hynix (HMT351U7CFR8C). There is at least the possibility of unbuffered ECC memory working. I don't think it is worth the risk.