The best thing to do is to be honest with him about your intentions and what you want if you tell him that you would like that also he may take it as you wanting a serious relationship but if you do not want that right now then you have to be completely honest and tell him that you don't want anything serious until he gets financially situated and tell him you are not saying that so that he can take care of you but so that he can take care of himself and bring something to the relationship besides sex. Tell him that he is a great person with alot to offer but he has to want better for himself also financially and that you want him to be the best man that you know he can be this will encourage him to take the steps needed to find a regular job.
Don't you think you would hurt his feelings even more if you started dating him and he got real feelings for you but all you wanted was to be bed buddies? That way he knows where you are coming from and he doesn't put his heart in soul into someone that may not feel the same way about him at the time. Maybe you could point him into the directions where he can find steady employment and this way you could possibly take the relationship to that other level. If you have anything to add click reply so that I can help you more.
You have to do what makes you the happiest and not please everyone else if having a sexual relationship with him will make you both happy then you have to talk him about what you want, how else would he know what you want if you do not explain it to him. Your friend tells you not to do this because he is a leach they care about you and your well being but it is you and you alone that can make your own happiness and know what it is you want from this guy. Maybe talk to him and ask him if he could deal with only being bed buddies and nothing else for now. This way you will know exactly what he wants from you also because he will be honest with you if he see you are being honest with him.