I think 302mav76 got it right, the first thing I did to my 72 when I got it was put disks up front and what a world of difference did they make. Stopping was not as exciting as it once was though, drove my car home from buying it 250 miles in the rain on old drum brakes and it was a fun experience.
according to what I found on howstuffworks.com you have a 5.0 HO motor that produces 225-235 horsepower http://auto.howstuffworks.com/1987-1988-1989-1990-1991-1992-1993-ford-mustang-specifications.htm your engine has more power than alot of the stock 302's. Take my 72's 302, 8.5:1 compression and 140 hp. big improvement over my old motor. http://www.maverick.to/grabber/mavchanges.html (oh from 71-72 they changed how they measured horsepower, that is why there is such a drastic change between the two years)
Bingo. Getting disk brakes on that thing should be your first upgrade, and you should be able to get it done with the budget you currently have.
