Spending the Extra 20%
Either get expert help (not a rock & roller) or buy a Mackie 1402 mixer and powered speakers such as the Mackie SRM350 or SRM450. If you're brave you can find these at good prices on eBay.
A full system will cost $3,000+ for 6+ channels/mics with all the trimmings, but will be expandable and easy to use. Whatever you do, don't skimp on speakers -- there are a lot of lousy speakers on the market.Cables
Cable gauges use reverse psychology: 14 is bigger wire than 16, etc. Cables for speakers should always be at least 16 gauge - bigger is better in this case. Skinny cables turn most of your amp's power into heat. And the longer your cables are, the fatter they need to be. You can find 12 or 14 gauge cables easily. You might eventually want two sets: one set of 50' and one set of 30', along with female-female 1/4" adapters (turnarounds) gives you some flexibility.
Make sure you get the heftier grade of mic cables - about 1/4 inch in diameter. Color cables are now available in sets of 10 bright colors. I got mine new on eBay, and they're of Canare wire, very good quality, no more expensive than standard cables.
Booms & Gizmos
Add to each one the best boom you can buy - believe me, they'll fall apart quickly if you don't. When I was a kid, I thought those gooseneck adapters the Beatles used were incredibly cool - stay away from them, they're a pain! You can economize on bases, but good booms are crucial. Get the ones with telescoping extensions, they save enormous amounts of space on stage. Beyer and AKG are good names. Get Ultimate Support speaker stands, they have a lifetime warranty and most others are much heavier and less reliable. Booms and stands are not the place to economize.
A power strip is a necessity for the mixer, monitors, and assorted other electrical gear that can and will show up unexpectedly. Get one with some protection against power surges. Also crucial is a 3-prong to 2-prong adapter (but use it properly, connecting the ground!). Having a variety of audio adapters comes in handy when someone wants to tape from the board or play a special tape. Replacement mic clips only cost $3 - keep extras on hand.
Better-sounding but bulkier monitors are available as floor 'wedges', although there is also a lot of junk in this form. A very reasonable high-quality one is the Fender 1270, which is available powered or unpowered.
On powered vs. non-powered monitors: Powered monitors have a built-in amp, and often have tone controls for the musicians. The tradeoffs are greater expense and extra power cords to add to the the tangle on stage.
Radio Shack's Role
Radio Shack has an important role in your sound needs: adapters, patch cords, extension cords, electrical tape, 1/4" turnarounds, ground testers, mic clips and some other small gizmos. Just no bigger gear! They make a decent PZM mic, but in general stay away from their mics, amps, and speakers.