Start by identifying what’s limiting your photos before buying anything. The Rebel XT is still a capable camera, so a body upgrade may not help much unless you specifically need better burst rate, handling, metering, or other camera features.

For many beginners, lenses make a bigger difference. If your issue is background blur or low-light indoor shooting, a faster lens is often the best upgrade. A 50mm prime, especially something like a 50mm f/1.8, was specifically recommended and can work very well for photos of children.

Also consider whether the real limitation is neither body nor lens. If your indoor photos suffer because of the slow kit lens, built-in flash, and poor light, an external flash may help more than a new camera.

In short: keep the Rebel XT unless you can point to a body-related problem. Upgrade only when you can clearly describe what you’re trying to improve—sharper images, more background blur, better indoor shots, faster action capture, etc. Since you’re still learning, continuing classes and practice will likely improve your results as much as gear changes.