diff --git a/.env.example b/.env.example
index 07dd15e..ddac900 100644
--- a/.env.example
+++ b/.env.example
@@ -11,14 +11,11 @@ PGID=100
 # External port mapping
 TIMETRACKER_EXTERNAL_PORT=8000
 
-# Data storage path
-DOCKER_STORAGE_PATH=/tmp
-
 # Django production mode (set to "1" for production)
 PROD=1
 
-# Database directory (overrides default in settings.py)
-DATA_DIR=/home/timetracker/data
+# Database directory (defaults to project root)
+DATA_DIR=/home/timetracker/app/data
 
 # CSRF trusted origins
 CSRF_TRUSTED_ORIGINS=https://tracker.kucharczyk.xyz
diff --git a/.gitignore b/.gitignore
index d74ec92..9caa4e0 100644
--- a/.gitignore
+++ b/.gitignore
@@ -5,6 +5,7 @@ __pycache__
 node_modules
 package-lock.json
 db.sqlite3
+data/
 /static/
 dist/
 .DS_Store
diff --git a/docker-compose.yml b/docker-compose.yml
index 9f8d1da..3ca2704 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -11,10 +11,11 @@ services:
       - CSRF_TRUSTED_ORIGINS=https://tracker.kucharczyk.xyz
       - PUID=${PUID:-1000}
       - PGID=${PGID:-100}
+      - DATA_DIR=${DATA_DIR:-/home/timetracker/app/data}
     ports:
       - "${TIMETRACKER_EXTERNAL_PORT:-8000}:8000"
     volumes:
-      - "${DOCKER_STORAGE_PATH:-/tmp}/timetracker/data:/home/timetracker/data"
+      - "./data:/home/timetracker/app/data"
       - "${DOCKER_STORAGE_PATH:-/tmp}/timetracker/backups:/home/timetracker/app/games/fixtures/backups"
     restart: unless-stopped
 
diff --git a/entrypoint.sh b/entrypoint.sh
index 3447a2b..2c3946d 100644
--- a/entrypoint.sh
+++ b/entrypoint.sh
@@ -10,11 +10,11 @@ groupmod -o -g "$PGID" timetracker
 usermod -o -u "$PUID" timetracker
 usermod -d "${USERHOME}" timetracker
 
-mkdir -p /home/timetracker/data /var/log/supervisor
+mkdir -p /home/timetracker/app/data /var/log/supervisor
 chmod 755 /home/timetracker/app
 chmod 755 /home/timetracker/app/.venv
 
-chown "$PUID:$PGID" /home/timetracker/data
+chown "$PUID:$PGID" /home/timetracker/app/data
 chown "$PUID:$PGID" /var/log/supervisor
 
 python manage.py migrate
diff --git a/timetracker/settings.py b/timetracker/settings.py
index b3719b6..07130f9 100644
--- a/timetracker/settings.py
+++ b/timetracker/settings.py
@@ -110,7 +110,7 @@ WSGI_APPLICATION = "timetracker.wsgi.application"
 DATABASES = {
     "default": {
         "ENGINE": "django.db.backends.sqlite3",
-        "NAME": Path(os.environ.get("DATA_DIR", "/home/timetracker/data")) / "db.sqlite3",
+        "NAME": Path(os.environ.get("DATA_DIR", str(BASE_DIR))) / "db.sqlite3",
         "OPTIONS": {
             "timeout": 20,
             "init_command": "PRAGMA synchronous=FULL; PRAGMA journal_mode=WAL;",