How does family sharing work

The following has information that may help: Share an iCloud storage plan with your family - Apple Support

Note that it is essentially a single billing for a 200GB or larger plan and that you each continue to use your own Apple ID for iCloud and that your photos and documents are still private. Either one of you can use any of the unused storage. Also see the following from the above link:

When you share a storage plan, your photos and documents stay private and everyone keeps using their own accounts with iCloud—just like when you have your own storage plan. You simply share the space available in the iCloud storage plan with your family members, so you only have one plan to manage.

Family Sharing is used both for sharing apps other downloads as well as for sharing iCloud storage. You can do both, either or neither. If you just want to share storage just follow the instructions in the link I gave previously -- it includes instructions on how to set up a new family plan.