To create a Google family and become a Family Manager, go to https://families.google.com . You need to add accounts there in order for them to be in your Google family.
The storage space a Family Manager has will be shared with the family members, so yes, your combined holdings will use up that storage space.
However, the storage that each individual family member has will be used up first. For example, if your wife has a free account, her Drive will first use up the 15GB, then start using your paid storage space. Another example: if your family member has 100GB paid storage (or any amount of paid storage), they will first use up that storage space, and only once that is used up will they start using up the Family Manager's storage space.
Once you have paid for a subscription (called Google One), you will easily be able to view the storage your family members are using from your own, by going to one.google.com. Google One comes with telephonic, chat and e-mail support. Here is a screenshot showing an example, where the first family member has not used up all of her storage (hence, it shows that 0GB of the Family Manager's storage is used), and the second family member has used up all of his storage (and it shows that he is using 3.12GB of the Family Manager's storage):