Before entering town, seriously consider saving outside of it. As you head upstairs into the main part of town, Kefka’s dreaded Light of Judgment strikes a house in the town, trapping a child within while the house prepares to collapse.
Had it not been for Sabin’s quick timing and strong legs, the child wouldn’t need to be saved; he’d need a funeral. Don’t approach the house yet, if you feel like shopping around and generally being lazy. You can heal up at the Inn, too. The only thing worth mentioning at the shops is the Jeweled Ring , which is a good idea, too. You should also bring along the Black Belt . Do what you want (which does exclude leaving town, of course) and equip the two Relics from earlier.
Head in front of the collapsing house’s door and speak with Sabin; after the conversation there, you’ll have only six minutes to save the kid inside.
After those six minutes, it is a game over, regardless of whether you’re in or out of the house.