Should I upgrade my slow iMac with an SSD or buy a new one?

Sounds like you have a base model 2019 21.5" iMac with a painfully slow 5400rpm internal drive.

iMac (Retina 4K, 21.5-inch, 2019) - Technical Specifications - Apple Support

Before you give up or do an internal SSD upgrade, try running it from an external SSD.

Use an external SSD as your startup disk … - Apple Community

If you decide to get a new Mac and budget is a concern consider the following to get more bang for your buck:

A new Mac Mini M4. 16 GB is the minimum it comes with and I found it to be entirely adequate for my use. I also got a 1 TB SSD storage. That came to $1086.

I paired that with a 32" 4K monitor w/speakers for $331. The total was $650 less than a similarly configured new 24" iMac. It runs rings around my i7 27" 2017 iMac - unbelievably fast.

Just some food for thought.

Getting an external SSD and booting and running from it will definitely speed up your current Mac. And you can take the external SSD with you when you upgrade your Mac.

More food for thought. I hope not too much.

It’s sounds like an old Mac, if it is older than 2019 then buy a new Mac . However before doing anything make sure your computer is totally backed up!!!!!!!!! Why your HD may be failing.

We also may get some clues if you post an EtreCheck report of the system to see if there is anything installed that may be causing your problem.