Life in the Slums is the third quest of Chapter 3, "Home Sweet Slum", in Final Fantasy VII Remake, taking place in the Sector 7 Slums. After Tifa Lockhart shows Cloud Strife to his room, she tells him to meet her next morning.
As the quest begins, open the door outside and then head downstairs, where the goal is to follow the marker to Seventh Heaven. A cutscene commences as Marle talks to Cloud, after which, head through the path to Seventh Heaven. Open the door inside, where Tifa will talk to Cloud and ask him to follow her around the slums. The game will then present a tutorial on music discs.
Follow Tifa around, first to the Item Store. After a cutscene, the player obtains 200 gil and can purchase a weapon. For sale is "The Prelude" track, some items, as well as materia: specifically, healing, fire, Ice, lightning, or Deadly Dodge materiall. Each of these materia can be acquired later on, so it is best to save the gil for the time being, though items can be purchased if low.
Continue following Tifa, first to another cutscene with Marle, and then into the Weapons Store. Cloud will decline to purchase any weapons for now, and Tifa will encourage Cloud to help the neighborhood watch. Follow her upstairs and head inside, where Biggs and Wedge can be found. Biggs will mention he can mod the Buster Sword, commencing a tutorial on weapon upgrades. For the Buster Sword, four upgrades are available: Max HP +100, Attack Power +5, Magic Attack Power +5, and Punisher Mode Strong Attack Damage 5% Boost. Attack Power improves Cloud's physical damage while Magic Attack improves his spellcasting ability, both of which are broadly helpful as Cloud is proficient in both. However, Max HP +100 is best if the player is finding the game challenging, and Punisher Mode Strong Attack Damage 5% Boost is a good choice for players who use Punisher Mode frequently.
After this, Tifa joins the party, and the next quest, "A Job for the Neighborhood Watch", begins.