In preparing for an adventure trip, when to buy airplane tickets is undoubtedly the most common question we get. With airline consolidation and elimination of many flights, airline tickets have gone up substantially and will likely continue to climb. Of course no one wants to buy a ticket now and find out the price dropped a month later, or to hold off on buying a ticket only to find it much more expensive the next time we look.
Unfortunately there is no good answer to that question, but here is our approach.
Generally, tickets are most expensive far in advance (more than four months) or very close (less than a week) to your departure date. Buying it closer to your departure time (say 3 weeks) may or may not be more expensive. It depends on how seats are filling up, how much competition there is, what the price of oil is etc.
At Adventures in Good Company we start looking at fares about four months in advance of a trip. The first place we go is Bing to see if they have a price predictor and fare history for the route and dates we want. If the price and schedule look OK, we might book right then. Yes, maybe the price will drop more later - but maybe it won't and we've locked in a price we're OK with. If we don't like the price, we then go to Kayak. Bing's results are actually powered by Kayak so you won't find anything different, but I find the interface easier to use and you can then set up a Fare Alert (maybe you can do this on Bing but it isn't obvious how). I also check Southwest if they fly where I'm going and possibly ITASoftware if I'm having trouble finding what I want, but neither of those will give you Fare Alerts.
Some other pssiblities for finding lower airfares: if you have a twitter account, follow the major airlines and also some websites that focus on lower airfares, such as Airfare Watchdog (I just generally like this website including their Facebook page). These generally work better when your dates are open.
But bottom line - your time is worth money too, and driving yourself nuts to find the lowest fare may be more anxiety and effort than its worth.
P.S. I often get sticker shock when I first look at prices. Looking at them over time allows me to adjust to the idea that I'm going to be paying that much.