How Many Quarters?

Since you have two unknowns, d and q, you need two equations.
10d + 25q = 385
d + q = 25

d = 25 - q
10(25 - q) + 25q = 385
250 - 10q + 25q = 385
250 + 15q = 385
15q = 135
q = 9

d + 9 = 25
d = 16

ok
Once the equation has been presented, no problem, right?
My question is: HOW do I learn to set up equations from word problems?

Does this come with practice? I ALWAYS know to let x = what I am looking for but I stop there! I just don't know how to reason out the reading of the word problem.

In this case you have two variables unknowns, the number of dimes and the number of quarters. If you have two unknowns you have to know two independent facts.* Fortunately you are being told them in the problem statement. You know how many coins you have in all. And you are being told how much they are worth.

So let d be the number of dimes and q the number of quarter. A dime is worth 10 cents and a quarter 25.

I have 25 coins in all
So
d+q=25
They are worth $3.85, this is 385 cents right?
So
10d+25q=385

See two unknowns, q&d
Two facts
d+q=25
10d+25q=25
Now you can solve for q and d using many different manipulations. You can substitute d in terms of q into the other relationship or use, as I prefer elimination
10d+25q=285 which is 5(2d+5q=77)
2d+5q=77
d+q=25
So subtracting the twice the latter from the former
2d-2d+5q-2q=77-50
and 3q=27 or q=9
and then solving for d=25-9=16

The final tool in solving word problems is the sanity check (always do a sanity check) plug d=16 & q=9 into
10d+25q=10*16+25*9=160+225=385 so checkoh, it's sane.

Rap c∫;?/

*this is in reality a much more general statement. If you have n unknowns (where n is a positive integer) and know n independent facts you can solve for all of them.

ok
I want to thank all who replied, especially raprap.