Class Variables Vs Method Variables

Question

While i am defining a class, i prefer to use following format.

public class ClassName{

   private String             var1 = null;
   private Map<String,String> map1 = null;

   public void process(){

      try{
           var1 = "Variable1";
           map1 = new HashMap<String,String>();

            // Do Some Stuffs Here with the varaibles.

      } catch(Exception e){
           e.printStackTrace();
      } finally{
           var1 = null;
           map1 = null;
      }

   }

}

But my friends suggest me to use following way,

public class ClassName{

   public void process(){

      String             var1 = null;
      Map<String,String> map1 = null;

      try{
           var1 = "Variable1";
           map1 = new HashMap<String,String>();

            // Do Some Stuffs Here with the varaibles.

      } catch(Exception e){
           e.printStackTrace();
      } finally{

      }

   }

}

My question is which is better and why?.

Answer 1

This depends entirely on the situation. It is generally a good idea to define variables with the smallest scope possible. So unless you plan on using your variables outside of the method, just make them method variables.