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Each user has their own account and you can share the games between the accounts. Their achivements and playtime, etc all remain on the account logged in when playing.
Save games are a little more 'problematic' as a lot of them are at Windows level, so you may need their own Windows accounts too. Although some games store them at a Steam level, which is shared on the PC as a whole....
Games downloaded onto the pc are 'downloaded' for any account that logs in, the space is shared. You can't split or combine accounts later down the line.
You would make a Steam -account for your kid. You'd log in with your kid's account on your computer. You'd then log in on your Steam -account, go to [Steam > Settings > Family], then you'd authorize the computer and tick your kid's Steam user as eligible.
Thus your kid's Steam -account can access your library from any of the (max: 10) authorized devices. Authorize your other kid's Steam -account as well.
As far as save games go. Some games save files under My Documents; and some even in the core game folder. Thus personally I'd recommend setting up separate Windows Users too when gaming on the same computer.
If they want to game together, you'll have to buy at least one of them an extra copy. Steam Family Sharing (gaming itself) works for one account at a time, thus simultaneous play is undoable. You don't have to download the games again on the same computer as they're accessed from a folder any Steam user on your computer can access.
Okay, I did all this for my grandson, but when I log into his account on my computer and try to start a game for him, it only has the option to purchase the game. There is no option to "Play". This is ridiculous. I shouldn't have to pay twice for a $60 game just so my grandson can play the game I already purchased in my own home. I thought he could play a game on my laptop while I played a game on my desktop with both of us in the same house. Used to... when you bought a game, you owned the disc and anyone in your house who wanted to play, could pop in the disc and play. Period. You didn't have to buy one disc for one of your kids and another disk for your second child. No parent could afford this.What is the point in Family Sharing, if you can't actually share anything. I only have the option on his account to "Purchase" a game I already purchased. I am sooo frustrated.