the friends with benefits dilemma

Amanda
It's the story we've all heard, right? I thought I could handle having a friend with benefits, but now I'm starting to think I was wrong...
I broke up with the father of my child after 4 years together. I wasn't in love with him anymore, and I knew he could feel my indifference. Soon after I was introduced to my friends brother who had just moved from out of state. He showed his interest right away and I turned him down. I was still fragile from my separation and not ready for anyone new. Time passed and we saw each other frequently. After one evening of hanging with friends we found ourselves alone and he kissed me. It was my first experience of intimacy since my break up and I hadn't realized how much I missed it. I was hooked. 
But he's living with his sister , and I'm living with my parents. Neither of us is independent, especially me. My parents are very involved in my life. They don't believe I should be getting involved with anyone for a long time. And I agree with them, for the sake of my child during this time of transition. But I still wanted to have my sexual desires fulfilled, so I proposed a friends with benefits arrangement and he agreed. 
I knew right off the bat that it was a mistake. Not only do our friends know about us, but when we hook up I always stay the night. We don't see each other when my child is with me, and I don't ask my parents to watch her just so I can be with him. Our encounters are few and far between, when the father has visitation. But just recently I've began to develop strong feelings for him. We communicate through text often, and when we don't talk I am constantly thinking about him. I hold back from doing things like kissing or holding hands in front of anyone because I know it's against "the rules" but I want to. And I want more from him too. 
I went on a trip with my friend and her family last weekend, including her brother. We drove together, just us, and talked a lot, and he even paid for my meals while we were out. When were around each other we enjoy each other's company, and it's becoming less and less about the sex. I get embarrassed when people ask what we are because I don't think we fall under any certain category right now. I feel caught in the middle and I don't know what to do. 
I feel like I just want to forget the title and just go with it. But if that means we get closer then my parents will be upset. They figured out that I have been seeing someone and have heard me mention him often. I should have know it would get out eventually! But between our circumstances, my parents disapproval, and my own feelings, I feel like I can't see clearly. What would you do?