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Mikepier
 
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Default basement insulation question

I live in a split level house with a finished basement that I moved
into back in July. This is our first winter and I noticed it was cold
in the basement and after further investigating discovered that there
was no insulation behind the wood panel walls. So I am in the process
of removing the wood panels, which is fairly easy, and putting
insulation inside the walls between the studs and on the sill plates
between the ceiling joists. I have a storage closet that has no
finished wall inside, it is just the foundation slab. How should I
insulate this? I was thinking of using those styrofoam insulation
boards and glueing them to the foundation. Also my furnace room has
exposed foundation walls. I know I'm not suppose to put anything
flammable near the furnace so is it better off just leaving the
foundation exposed?