The correct method of using rigid foam is to run continuous 4 foot by 8 foot sheets of the foam across the concrete basement wall making the rigid foam the de facto wall.
How to insulate concrete walls with foam board.
The concrete should be dry and free from cracks before installing foam insulation boards.
Simply offset the studs from the wall and the foam when applied will completely seal the wall and insulate it.
The moisture drive in a basement is from the interior to the exterior so the spray foam prevents any condensation or mold growth while providing the highest r value per inch 6.
Cut each sheet of rigid foam insulation to fit the crawl space wall height.
The insulation may be rigid board extruded or expanded polystyrene or polyisocyanurate closed cell spray polyurethane foam cellular glass fibrous batt or fibrous blown in insulation note however that fibrous insulation is susceptible to moisture.
Use a straightedge and a utility knife to slice through the insulation then snap the board along the cut line to get a.
Now as you glue the panels to the exposed concrete blocks leave a inch gap at the floor and ceiling and cut holes in the panels to fit around outlets and wall switches.
If necessary address moisture problems and seal cracks before you begin.
After that thin furring strips are installed on top of the foam to provide a firm base for the drywall screws and drywall.