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How you configure the location of a device depends on how, when and when you are using it. You'll also want never to attach it to a device that doesn't need your position to operate entirely. Please set it to Using the App, or to Always in a case that needs to know your location, such as a navigation app.
You might want to use the app to ask Next Time to be alerted when you are watching you, which might or may not require your location. If you choose this option, you will at some point be told that your device has spent several days using your place. Then you will be asked if you want to keep using the background location. You can choose to leave the device open at all times or change the feature only during use.
Back to the Services Location screen. Tap the Post My Position key. You will want to allow My iPhone to track your phone if it is lost or stolen. Here you'll want to You.