(MONEY Magazine) – Prepare for the worst. Work may dry up, or you could get sick. You'll need to keep at least six months of basic living expenses in the bank.

Start establishing a network of clients at least three months before going solo. Line up a couple of jobs that you can start immediately.

Health insurance premiums averaged $756 a month for a family and $282 for individual coverage last year. If a spouse's plan isn't an option, COBRA allows you to remain on your old plan for 18 months—but at your expense. If you don't have serious health issues, consider a health savings account (HSA). An HSA requires a high-deductible insurance policy but lets you save for that deductible tax-free. Health insurance premiums are 100% deductible for the self-employed.

Tax returns are tricky for independent consultants. You can often deduct everything from the cell-phone bill to the gas tab, but you are responsible for quarterly payments to Uncle Sam. Detailed records are a must; a good accountant is a plus.

Life insurance policies can often be carried over from the job you're leaving, but the tab can be expensive. If you're in good health, you might do better on your own. But do some investigating before you cancel any policies. —TARA KALWARSKI