I wouldn't use it at all. It's just the title of a 1938 movie. I don't think it's a 'proverb' at all, and therefore any meaning you ascribe to it is somewhat arbitrary. There is no 'true' meaning to be gleaned from watching the film, I'm sure - it's just a B-movie western that didn't exactly go down in history, and the title was probably knocked out by the studio tea-boy.
It's rarely said, and because of the above there's no 'fixed' meaning. Sometimes people say it when they mean "You can make/find money anywhere".
Having said that, let's assume it is a good ole American proverb/homily...
Taken literally, it means the best way to live is to take pleasure or find value in what you actually have available, rather than being disatisfied and wanting things you can't/don't have.
It's not worth describing a whole context for when it would be appropriate to say this. We'll just suppose you know somebody for whom that sentiment would be good advice. Say it then, and everything will be fine.
Unless he doesn't understand you, in which case tell him to watch the movie.