diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index 066e9671..6a60d077 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -6,6 +6,21 @@ Atuin doesn't require anything super special to develop - standard Rust tooling
 
 Before working on anything, we suggest taking a copy of your Atuin data directory (`~/.local/share/atuin` on most \*nix platforms). If anything goes wrong, you can always restore it!
 
+While data directory backups are always a good idea, you can instruct Atuin to use custom path using the following environment variables:
+
+```shell
+export ATUIN_DB_PATH=/tmp/atuin_dev.db
+export ATUIN_RECORD_STORE_PATH=/tmp/atuin_records.db
+```
+
+It is also recommended to update your `$PATH` so that the pre-exec scripts would use the locally built version:
+
+```shell
+export PATH="./target/release:$PATH"
+```
+
+These 3 variables can be added in a local `.envrc` file, read by [direnv](https://direnv.net/).
+
 ## What to work on?
 
 Any issues labeled "bug" or "help wanted" would be fantastic, just drop a comment and feel free to ask for help!