How do you decide when to use functions in C?

Either approach is fine. Getting a working solution in main first can help you see where the natural pieces are. Then look for a block that has a clear job, give it a name, and move it into a function. Compile and test after each change so you know where to look if something breaks.

Your plain English steps are a good starting point, but not every step needs its own function. If a section handles input, another calculates a result, and another prints it, those might be useful boundaries. The goal is for main to make the overall flow easier to follow, not to make it as short as possible.

When you extract a block in C, ask two questions: what values does it need, and what does it give back? Pass the inputs as parameters and use a return value for the result when that makes sense. For example, a calculation function might take a number and return the calculated value, while a printing function might return void.

Variables local to main aren't automatically available inside another function. You'll also need a declaration before you call a function if its definition appears later in the file. Try extracting one calculation first, then check that the program still produces the same output.

Repeated code is a strong hint. If you're doing the same calculation on different values in several places, a function with a parameter can keep that logic in one place. A loop may be the simpler choice when you're just repeating the same operation in sequence.

I wouldn't worry about a strict line count. A function should have a job you can describe clearly, but that doesn't mean every tiny operation needs a name and a separate call.

Look for a function that does two noticeably different things, such as gathering input and then performing a calculation. Splitting those can make each piece easier to understand. A function used only once can still be worthwhile if its name makes a complicated section easier to read.