There is a specific way this goes wrong. You plan something nice, your kid is excited for eleven minutes, and then you notice they are doing it wrong. You take over. They wander off. You finish alone, the thing comes out great, and nobody remembers it fondly.
Avoiding that is mostly about deciding, before you start, what the project is for.
Choose the project for the experience
The main variable is length. A child's interest in a build is measured in one sitting, and a project that stretches across three weekends is a project they will not finish with you.
Small, useful, and theirs is the formula. A box. A shelf for their own room. A stand for a plant. Something with a visible finish line and an owner at the end. The ownership matters more than the difficulty; a plain box that belongs to them beats a nice one that goes in the garage.
Give them a whole step
The difference between helping and being a spectator is owning something start to finish.
Marking is a good first one. Sanding is another. Driving screws into pilot holes you drilled. Applying finish. Pick a step, hand it over completely, and let the result be their result.
The temptation is to hover, correct the angle of every stroke, and quietly redo the section they missed. That reads clearly to a kid, and what it says is that their part was not really their part.
Let it be crooked
The hardest instruction: leave the mistakes alone unless they affect safety or whether the thing works.
A visible gap at a corner is fine. An uneven finish is fine. A screw that went in at an angle and shows is fine. The child who points at a crooked box and says he made it is getting exactly what the project was for.
If something has to be fixed, do it with them and say why, in plain terms. That is teaching. Silently correcting it while they are in the other room is not.
Safety without ruining the mood
A few rules, applied every time, cover most of it.
Eye protection is not negotiable, and it works better if you are wearing yours too. Hearing protection whenever anything loud runs, since noise damage accumulates and does not undo itself.
Be explicit about which tools are theirs and which are yours. A clear boundary is easier for a kid to follow than a case-by-case judgment. Hand tools, clamps, and sanding blocks are usually theirs early. Powered tools depend entirely on the individual child, and even then it is hands-on supervision, not a nearby adult.
Set up so the workpiece is clamped and at a height that does not require them to reach across. Most kid injuries in a shop come from an awkward position, not from a tool being inherently dangerous.
Stop early
The strongest move in the whole thing is quitting while they still want to keep going.
If interest fades at the eighty percent mark, put it away and finish it together next time, or let it stay unfinished. A project abandoned in a good mood is a much better memory than one dragged over the line while everybody is annoyed.
What they actually take from it
Not joinery. What they take is that a thing in the world can be made rather than bought, that mistakes are survivable, and that you were willing to be slow and patient in a way you probably are not on a paying job.
Years later they will not describe the shelf. They will describe standing in the garage with you on a Saturday. That is the deliverable, and it does not require the corners to line up.