Simplest way is set correct height is to sit on the bike (leaning upright against a wall) with your heel on the pedal. Leg should be just straight but not stretched. Thus when pedalling with ball of foot over pedal you will have just the right bend.
Be careful though it you have great clompy heel tread that adds maybe 1/2 inch.
However, if you are getting lower back pain one of the common reasons is the stretch is too far to the bars. Start with the saddle in the middle of the post and try moving it forwards 1/2 inch at a time. The old (rough)rule is a plumb line dropped from just below the knee joint should fall over the centre of the pedal.
