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So I've learned that this is obviously not the place to ask personal questions... note to self.
Thanks a bunch.
Don't take it personally, the guys here aren't really prepared to answer questions about these kinds of situations. A lot of the guys in this section are probably a lot younger than you, and like you would be completely lost if this happened to them. This isn't really the forum for those kinds of topics.
Honestly, my advice for you is to first forget about the sister. You have a baby on the way with a girl you don't want to be with, the last thing you need is more drama in your life. You Know for a fact that no good will come from pursuing anything with your new baby mamma's sister. That's just asking for all kinds of trouble. So just drop it, there are plenty of other women out there.
Secondly, you need to have an open and honest discussion with your baby mama. You need to be clear with her that you don't want a relationship with her, but you are going to be part of the baby's life. You need to be upfront with her about this. It's going to be a hard conversation, but if you are man enough to make a baby, you are man enough to talk to the mother and come up with a plan.
Thirdly, start saving money. You said you're self employed, I don't know what that means exactly, but you're going to have to start working a lot harder and spending a lot less money on yourself. The cost of a child is ridiculous nowadays, you need to put aside as much money as you can for the baby. This is going to mean sacrifice, and it is going to change your "bachelor lifestyle" but that's just the way things are and you are going to have to deal with it.
Lastly, don't fuck up things with her family. You are going to have to spend a lot of time with them in the future if you want see your child, so don't do anything to make them hate you, like date her sister, or anything dramatic. Try as hard as you can to get along peacefully with her and her family, for your child's sake, because that your baby's family too.