SD is not the only one taking advantage of you - your DH is too, as well, big time. You are giving up you life so he can do as he pleases with his SD and baby.  There is nothing equitable (financial or otherwise) in your marriage.  Why should you sacrifice your happiness so he can give the SD a life of no responsibilities?  This will continue with the baby in a never ending circle.  I wish all the best as you think through your options and hope you can find some happiness.

Going over what should have happened at age 15 isn't  going to do a bit of good now. Focus on the present.

The young lady has a child now she must care for and that includes financial support. Instead of Dad running around behind her with food, have him haul her behind down to the SNAP office for food assistance and WICK for baby formula. They next can visit the office to find out about education (community college) assistance and then off to the daycare assistance office. In the middle of all these stops the state will demand she declare father of baby and help her obtain DNA test. This will allow 'the lucky winner' to start paying child support towards the child. 

In the meantime, you cut off your DH's cash flow that goes out the door to SD. If he has money to hand his daughter he certainly has money to pay more than 30% of the household contribution. Sit down, figure out the budget, figure into the budget personal money for yourself. You've been supplementing this household and all its should be unnecessary foolish long enough. Time to spend some of your hard earned cash selfishly on you and your own wants and needs. Example, if DH won't go for an occasional weekend get-away with, pfft. Let him sit at home and invite one of the ladies from work to go with you. 

If you aren't going to look after your own self, don't expect anyone else to. Sit him down lay out the new 'this is how it is going to be' plan and if he squeals and rejects than you have to decide if this is the way you want to continue on or if you'd rather move on. From the age of your oldest son, I'm guessing you're pushing 60 (give or take a few years). Almost time to start thinking of retirement and how you want the next chapters in your life to be. 

Definitely not the time to be playing wallet and 'mommy' on a adult woman who seems bent on wasting her life. You can't force your DH to see this from your viewpoint, but you can definitely make him see what you , yourself, will no longer play a role in. 

Make your stand and stick to it. Life is too short to be still trying to raise an adult f-up skid. 

Completely agree with twoviewpoints.

You've gotten used to the dysfunction that exists between your H and his daughter. He enables her, and you're supporting and participating in it even though you know it's wrong.

It cannot be emphasized strongly enough that you are jeopardizing your own future - and for someone who likely wouldn't ever speak to you again if your H dies. You simply MUST stop hemorrhaging money; you can't afford it, and it's crippling your H's daughter.

Separate finances, and tell your H that starting 1 April, he will be responsible for half of the household bills plus X amount  to be put in a separate account (a slush/retirement fund ). Make an appointment with a financial counselor and a marriage counselor, and go with him or without him. There's a good chance that your H won't be willing or able to change his unhealthy parenting habits, and you'll have to get your ducks in a row and prepare an exit strategy to save yourself. 

I saw this sort of enmeshed enabling in my late FIL. He spoiled both of his daughters, while requiring nothing from them academically or as humans. Drugs, skipping school, and promiscuity were their norm, with Daddee  doting on them and handing out cash like an ATM. The younger daughter eventually straightened out, but has no education, no career. The elder has been an addict since she was a teen. She was a welfare lifer, and Daaddee always subsidized her. When my FIL died, elder SIL spiraled even further. She is in her mid fifties, but can't adult or take care of herself. All thanks to an enabling Daaddee (who died almost flat broke). Point being,  it's a sickness that never ends so prepare for the worst while hoping counseling will wake your H up.

All you can do is stop enabling him to enable her - demand he pay his fair share of the bills and anything else your household requires (maintenance, vacations, car repairs, etc) before he send money SD's way.

Twoviewpoints has it right. Decide what you're willing to give and make it available. Also make sure everyone knows what you aren't willing to give.

Does your husband know you're thinking of divorce? Does he know how seriously you're taking it? Time to map out how you want things to be and present it to him. If he can't change, you can figure out what to do about it. But until then, he needs to know this is a dealbreaker for you.

i thank Buddha my SD didn't have kids. That does sentence you to another 18 years of BS if you can't change the dynamic. Give it a try. You don't have to totally fix it -- you just have to change his behavior enough to make it bearable.

Your DH’s life is sad. The daughter and grandbaby’s life will be sad, too. Do you want to stick around to see that pain? This precious child is being raised doubly poor by a mom with no life skills. If you stay, you will end up having a front row seat to the pain without much of a way to fix it. 

you deserve happiness.

I advise you move on. You can and will have a happier life. Imagine yourself doing all those things you always wanted. And if you still want to make a difference in the life if a child with similar circumstances, do volunteer work with clear boundaries. There is no shortage of children who need help. And there are new moms similar to your SD who need help, but who actually want to work and improve themselves. Your servant’s heart would be better spent elsewhere. :) 

You are  a financial backer for his previously enjoyed family.  Read the recently posted blog on thr SM from Maryland who also sounded like her DH's financer.

Time for the burning platform to get her to launch.  She is ostensibly an adult and she is a breeder who needs to be cut off.  Immediately.

You and her dad created her current manipulative money sucking entitlement dependent life.

Quit financing her or her spawn directly and quit providing a conduit for daddy to vector his income to his toxic breeder daughter and her disgusting low class baby daddy and boyfriends.  You subsidizing the bills allows DH to waste his money on his shallow and polluted gene pool.

If you don’t, nothing will change.