T.,
We chose to wait to have our first child until we could afford it financially. I was the child of a single mom and money was always tight for us. I saw my mom struggle and didn't want that sort of stress on our shoulders nor did I want our child to ever go without. And please, I'm not talking about spoiling him with material things or high end clothes/toys. After the way I grew up, I just didn't want to tell him "we can't afford it" for every little thing and later in life - college. Not to mention, I saw friends who had kids when they weren't financially ready and I could see the stress on them and their marriage.
After our son was about a year, I started having the urge for another one. Financially, it wasn't in our plan, but I wanted another baby. I didn't even want to bring it up to my husband as I didn't think he would be willing. Since having our first son, we moved into a bigger (more expensive) house and changed to a more expensive daycare. BUT, I was determined. I looked at our spending habits and realized there was A LOT of room for improvement. Even though we had no debt (except cars/mortgage), we were wasting a lot of money on needless things like going out to eat 4-5 times a week! That alone, at $30 a night, was a good portion of the way towards the cost of daycare for Baby #2.
To make a long story at least a little shorter...I'm due with our second son in about 7 weeks. I was amazed at to what could be done (getting rid of the 4 movie channels we had that we NEVER watched) to make it happen - IF we were willing.
On another note, I was in HUGE credit card debt for a long time. So, I feel your frustration with regard to that. It was like a dark cloud hanging over me every.single.day. I hated it. BUT, I worked my @ss off and was able to pay it all off about 8 years ago. Since then, I've never let a balance roll over from one month to the next. We use our credit cards (I actually pay for daycare with my Discover Card) but instead of paying interest, we get cash back rewards and make money on them. It will take some time to get out of the hole, but know that it IS possible. And, once you are out - life is a much brighter place.
I'm not sure of your exact situation (and I don't expect you to share that info, lol)...but, you are headed in the right direction with your way of thinking. One thing that I considered when thinking of another baby was selling our house and getting into a smaller, more affordable home. I'm not sure if that's an option for you or not. As someone else mentioned, another option is your choice of daycare. We are at a center (expensive) and looked into an in-home situation. As it turns out, we couldn't find one that we were comfortable with. But it may be an option for you in your area.
Ok, I've blabbered on way too long here. If you'd like to chat further, feel free to email me (____@____.com).
Good luck, I truly hope that you can work this out and have the second baby that you want.
T.