It's always good to get everything laid out in black and white. Don't be embarrassed! We're all different, especially in the standard of living we're willing to accept. Some comments:

When I talked to the money advisor, he thought that what I'm paying in interest is going back into my TSA account. I haven't checked on this, but it doesn't make sense to me. How would they make any money?

If I'm guessing right and this is a loan from a work-based retirement plan, this is how it works. When you borrow, you borrow your own money out of the plan. When you pay it back, you pay interest, but the interest is deposited into your own plan balance. They don't make money - but they shouldn't, because it was your own money you borrowed, not theirs.

I think I should keep our money until bills are paid since interest is 0%. I can earn a little bit of interest on the money in the mean time. Is there something wrong with this thinking?

Nothing at all, as long as you are disciplined enough to keep the money in an interest-bearing account rather than spending it. I've done the same thing with 0-percent credit card offers.

The only follow-up suggestion I have for you is this: once you have your e-fund in the shape you want it, think about setting some goals for investing. You can get plenty of help with that here.

dan