I have 10 gb of ram with 9.75 gb usable. I should probably explain the lag more, I tried a few different things, not having texture mods on, and not having model mods on. The last thing i did was only have cheats on, yet it still lagged as much as before. It would lag more if i had it in full screen and less (though only a little less) when i had it in windowed mode. Guess i should have been more detailed when i first asked.
10GB? Does that means yoru rams are not paired to be alike? As in if you have 2 be 4+4 or if you have 4 rams 2+2+2+2? With 10 GB I do not think you are running your ram in dual channel, which will probably make your rams quite slower too. It happens when rams are not pairs together to be the same with each other.
As for your PC definitely GPU. CPU would mean you would have to take everything. Motherboard, CPU and rams. GPU can go by itself, not to mention at least for FF7 you do not need a good GPU.
Older games, meaning before 2008-10, did not ask much from CPU except the games that had real time shadows, which you could turn to low or off. So your CPU can make it if you do not play newer CPU intensive games. If you get a GPU though, do not get a really cheap one. I have a PC that has an inter that more or less has the same power as your Athlon and a good old GPU and it can play new games like SIMS 4 or whatnot.
Go here and check whats the cheapest best you can afford. Your current GPU is at the bottom of Low to Mid Range.
http://www.videocardbenchmark.net/