How to quit being friends?

IMy friend has taken 5 years to get an ociates to be an rn. All she does is make up stories, crazy stories. She lies about being molested and even makes up friends for attention. Shes just nuts. And dumps her kid (with down syndrome) off on her parents, in fact he lives with them. While she lives in a different county. Then she always tries to talk down on people like shes god. It really irks me because we've been friends since grade school. But I dont appriciate being talked down on, she even tries to insult my husband and he earns more a year than she could even dream of making! What should I tell this b*tch next time she tries to put me or my hubby down? I am done being friends with such a negative person. She even gets mad when she calls me and Im hanging out with other friends. I dont want to be friends with her anymore, but at the same time, we've been friends for long time...should i just not talk to her anymore?