How do we decide if a substance is paramagnetic or diamagnetic?

An electron behaves as if it were spinning on its axis. The electron bears a charge, and a charge in motion is an electric current.

We learn in physics that an electric current generates a magnetic field. So an electron behaves like a tiny magnet.

An electron has a spin magnetic moment that can line up with or against an applied magnetic field. Lining up with the field is the lower energy state. It corresponds to #m_s# = +½.

If all electrons in an atom are paired, then the number of electrons with #m_s# = +½ is the same as the numbers with #m_s# = -½. The magnetic moments cancel, and the substance is diamagnetic.

Thus, NaCl is diamagnetic, because all spins are paired in Na⁺ and in Cl⁻.

If an atom has one or more unpaired electrons, the magnetic dipoles of the unpaired electrons will line up with an applied magnetic field. The substance will be paramagnetic.

For example, the electron configuration of nickel is #["Ar"] 4s^2 3d^8#. Nickel has two unpaired #d# electrons, so it is paramagnetic.

Note: an atom has other magnetic moments besides those caused by electron spin.