In Tenel, go to the blacksmith's shop and talk to him. He will give you a Fruit Knife. Go to Madril and enter the shop. Talk to the kid at the counter and give him the knife. He will give you 300 Sukel.
When you get a new sword, sell your other weaker swords.
When you get though the Aquatic Ruins, you can keep returning to fight the earns to get more Sukel and experience.
Hint: Sword Of Gear:
Tiny gears are scattered all over the world on the ground. You cannot see them, but if you go near them you will automatically pick them up. If you get 30 of the 32 tiny gears and return to the house on the snow plain with a big snowman in front of it, the man inside will give you the "Sword of Gear". It has Attack +50 and Defense +10. If you keep talking to that man after you get the sword, he will tell you about the Turtle and the Pebble.