Adding code to the functions file

I would like to add this code (http://digwp.com/2010/06/shortcode-for-includes/) to my functions file.

My question is this though. I’m working on a child theme and I don’t have my functions file in my child theme folder.

Do I need to add the functions file to the child theme folder. Or, do I add it the original location.

If adding it to me child theme folder, how do I add the file to that (lol!).

AND, either way, which folder contains the functions file (lol again).

Lastly, does anyone understand those instructions. Is it saying:

Create a “page” for the code/content you want added to several page. Then, create a shortcode that calls that content/code into whatever page the shortcode is used?

http://digwp.com/2010/06/shortcode-for-includes/