You should repeat the instructions for bind off all the way around the entire headband
(or until only one st remains). K2tog as you usually do. You'll have one st from this new round (or row if you knit flat) on the right hand needle. Slip that st back onto the left hand needle and knit it together with the next st on the left hand needle. Again slip the new st back to the left hand needle and k2tog with the next st. Keep repeating these steps until there is only one st left. Break your yarn and thread it through the single remaining st. Do all this fairly loosely so that the bind off is nice and stretchy.