I think you know the answer here, you just don't want it to be so. What she's saying doesn't make sense to the rest of it.

She's been burned, she's afraid to commit, she's scared, but you say she's never had a healthy relationship until now. She doesn't have a healthy relationship now; she's not healthy. By your own admission, and apparently hers, she's screwed up from her past. Until she resolves her issues she's not healthy, and until she's healthy she's not capable of having a healthy relationship. An unhealthy person cannot have a healthy relationship.

She says she needs time to get her life together. What's she going to do? Is she seeking therapy with a licensed therapist? If not, then she's doing nothing but continuing her messed up ways. If she could resolve her own issues, she'd have done that long ago and wouldn't have continued to have bad relationships. If she's seeing a therapist, then great! Your job will be to bow out of the picture and leave her to focus on herself, your added involvement will only take away from the work she's able to do. If she's not seeing a therapist, then nothing's going to change and you're wasting your time. So either way, bowing out is the thing to do.

She suggests having a monogamous FWB relationship. Ridiculous. FWB MEANS no relationship requirements, if you're to remain monogamous, you're not FWB, you're in a relationship. What she's really asking though, is that you stay true to her while she avoids having to deal with a relationship. She wants to focus on herself, her kids, she has school and doesn't want to neglect you, she's messed up and needs time to clear herself up....she doesn't want a relationship, BUT, she wants you to stay faithful while she focuses on what she wants...oh, and she wants you available for sex when she wants (and probably more often to make sure you stick around).

If she really wants to work on herself, really wants to focus on kids and school, then she needs to be fair to both of you. That means breaking ties so she's free to stay focused on what she REALLY needs - herself, her kids, school, and so you are free to explore other options and have YOUR life. What she's asking is not only unreasonable and selfish, but it also illustrates just how screwed up she really is.

So your job here is to be a strong man and tell her that you're breaking ties so she's able to do what she needs to do and that WHEN she's gotten through therapy, gotten herself together and is ready for a relationship, she can give you a call and if you're available and interested, the two of you can try again. It doesn't have to be done, it just isn't right right now. So giving each of you the freedom you should have to continue your lives as you should is the right way to go. It gives her time and it keeps you from hanging on a string for no reason (if she never gets herself together or, if after she gets together she realizes you're not right for who she is at that time -- this is very possible).

Not the answer you wanted, I know, but it's the truth.

If she's wants to focus on school and herself, then clearly she doesn't have time for a relationship -- and by relationship I mean involvement of any kind. You know that. You say she's willing to have a FWB