MaxiFi sets annual discretionary spending amounts to smooth (equalize across years) your household's Per-Adult Living Standard to the extent possible without having you borrow against future income. The Per-Adult Living Standard is discretionary spending per adult equivalent in the family. For a single, childless adult the Per-Adult Living Standard and Household Discretionary Spending are identical. But for households with children and/or two adults, it gets a little more complicated.
First, children typically consume less than adults. MaxiFi assumes that children consume at 70% of the level of an adult (you can change this Adult Equivalence Factor under Settings and Assumptions).
Second, MaxiFi knows (from your inputs) the years in which your household size will be relatively large and the years when it will be relatively small. It also knows that achieving a given living standard per person is cheaper in years when your household's size is larger. The reason is that "two can live more cheaply than one." A married couple with two children doesn't need to pay four heating bills, it can buy in bulk, it can share the use of cars, etc. These are called economies of shared living.
MaxiFi accounts for economies of shared living by allocating more of your lifetime discretionary spending to years when your household size is small and you can't share expenses. The program assumes that 2 adults can live as cheaply as 1.6 adults (you can change this Economies of Shared Living assumption under Settings and Assumptions).
To summarize, MaxiFi arranges your annual discretionary spending to keep your Per-Adult Living Standard constant over time to the maximum extent possible without letting you go into debt. If you face cash constraints that require having a lower living standard for a while (as you pay off your mortgage, get the kids through college, etc.), the software will smooth your household's Per-Adult Living Standard over the period during which you are cash constrained and smooth it at higher levels in periods thereafter. If you are constrained over multiple periods, the program will show you having one living standard for a while, a higher one for a while, followed by a yet higher one for a while, and so on.