diff --git a/.env.example b/.env.example
new file mode 100644
index 0000000..e60e932
--- /dev/null
+++ b/.env.example
@@ -0,0 +1,3 @@
+PGHOST=db
+PGUSER=postgres
+PGPASSWORD=changeme
diff --git a/README.md b/README.md
index 5db657d..71fd767 100644
--- a/README.md
+++ b/README.md
@@ -20,6 +20,7 @@ This app demonstrates Rails 7 with PostgreSQL, import maps, turbo, stimulus and
 
 ## Initial setup
 ```
+cp .env.example .env
 docker compose build
 docker compose run --rm web bin/rails db:setup
 ```