Nicole, I think your decision to leave room for higher paying work is a sound one. In general, I'd be cautious of taking on a big, all-consuming project at a low rate. If you're busy working for peanuts, it's tough to complete and secure higher-paying work, which is crucial if you're trying to support yourself through freelancing.
Consider also: Clients who want to pay writers low wages often don't know much about the writing biz and can be very difficult to work with. And to collect from when you're finished. Not that you don't occasionally run into those issues with bigger clients, but that's the way I'd bet.
So I think you're wise not to put all your eggs in one basket.