We also switched cold turkey. We already ate all organic beef and milk. Our grocery bill went up a little, but because organic meant cutting out most packaged and convienence foods it hasn't been that bad. Over the two years since we made the switch, I have gone back to buying a few non-organic items. I buy non-organic cereal because I couldn't find an organic one that we liked that wasn't loaded with sugar and the same with crackers. For both of those items we eat the healthiest non-organic varieties in the grocery store. I also stopped buying organic bread and began making my own with non-bleached, non-organic flour. Oh, and we eat regular cheese in addition to homemade. There is a law against giving hormones to dairy cows in Canada and my husband eats amazing amount of cheese.
We also stopped using all non-stick cookware
I have a very large vegetable garden and try to freeze or can as much as possible to eat throughout the year.
I would say switch to organic as much as you can, see how much it is costing you and go from there. It's all about priorities. We don't go on vacations, have a big TV (or cable), buy lots of clothes etc but I just won't skimp on food.
As for health, well I got pregnant after trying for 2 years which might have been due to our new diet. My kids are almost never sick. My daughter is almost five and went to the doctor for the third time in her life this winter. In fact we are all very rarely sick. I think though, that the health benefits willbe long-term for the whole family.