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Variables are for storing data. It depends on the scope the variables need to be recognized in. It is good practice to declare variables at the top first thing, but you can always go back and add new variables later when you need them.
For example, you might declare variables “x” and “y”, and later want to add them together and store them in “sum”. Once you have x and y, then assign a value to them, you can go to the top and create a “sum” variable to use for this.