In Photoshop, choose File>Open and navigate to the digital paper file (I suggest using a COPY of that file, so you don't permanently change the original). Then, use File>Place and navigate to the family photo. This will create a new layer in your document. You can resize and reposition the photo, as you place it, then click the checkmark at the top of your Photoshop window (or hitting Enter on your keyboard). Or, you can choose Edit>Transform>Scale for altering size/position after placing the placed file
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