Wear it as tight as you can get it. If you didnt get sore just from tightening it, its not tight enough.
I wear the belt higher for deadlifts otherwise it pinches and bruises. It rides up anyway on setup, so its inevitable. For squats i push it just low enough that it doesnt rub on my pelvis in bottom position.
I may be way off, but it seems like you put it where it feels right and you feel secure. Everybody is a bit different, but as long as you're not compressing ribs with it you should be okay.
I only use belts on my last warmup and for worksets. Using it the last warmup gets you used to it for the worksets. Plus, while on LP. your warmups should be getting heavier nearly everytime so you're gradually get used to sqautting heavier and heavier weights without the belt on. I started using the belt at around 355# squats right on up to my end of LP. By the end I could squat close to 400 for reps without a belt when properly rested.
If you havent bought a belt yet i would recommend getting an Inzer Lever belt. I have a great quality belt from BestBelts.com, but regret not going with the lever.
I've been out of the gym for two weeks now do to other obligations and feel really sad and lazy right now.