It's called an emergency fund for a reason - as a freelancer / consultant you should be putting away even more than the average worker because your income may s

It's called an emergency fund for a reason - as a freelancer / consultant you should be putting away even more than the average worker because your income may swing like that. For you, I would keep 6 months of living expenses in a savings account that is difficult to get to (I keep mine in a local credit union and don't have a debit card for it so I have to physically go in to withdraw which helps curb impulsive purchasing). Definitely go the contractor route - it is better pay. Also realize, though, that it's about more than just your programming skills. As a contractor people will pay you well to solve problems. Keep your skills fresh even if it means a little extra effort and some mistakes, you will be better off in the end (I am).