diff --git a/.env.example b/.env.example
index f56c1e8..5fb8b48 100644
--- a/.env.example
+++ b/.env.example
@@ -10,10 +10,13 @@ JWT_SECRET=your_very_long_random_jwt_secret_here
 # Database Configuration (PostgreSQL)
 DATABASE_CLIENT=pg
 DB_USER=picpeak
+# IMPORTANT: Avoid $ character in passwords - Docker Compose interprets it as variable substitution
+# If you must use $, escape it as $$ (e.g., Pass$$word instead of Pass$word)
 DB_PASSWORD=your_secure_postgres_password_here
 DB_NAME=picpeak_prod
 
 # Redis Configuration
+# IMPORTANT: Same warning applies - avoid $ or escape as $$
 REDIS_PASSWORD=your_secure_redis_password_here
 
 # Admin Account (initial setup)
diff --git a/DEPLOYMENT_GUIDE.md b/DEPLOYMENT_GUIDE.md
index 9251d33..6679985 100644
--- a/DEPLOYMENT_GUIDE.md
+++ b/DEPLOYMENT_GUIDE.md
@@ -58,13 +58,18 @@ Generate secure values:
 # JWT Secret
 openssl rand -base64 64
 
-# Database Password
-openssl rand -base64 32
+# Database Password (avoid $ character - see warning below)
+openssl rand -base64 32 | tr -d '$'
 
-# Redis Password
-openssl rand -base64 32
+# Redis Password (avoid $ character - see warning below)
+openssl rand -base64 32 | tr -d '$'
 ```
 
+⚠️ **PASSWORD WARNING**: Docker Compose interprets `$` as variable substitution. Either:
+- Avoid `$` in passwords (recommended - use the commands above)
+- Escape `$` as `$$` (e.g., `Pass$$word` instead of `Pass$word`)
+- Quote the entire value: `DB_PASSWORD='Pass$word'` (less reliable)
+
 Update `.env` with:
 - `JWT_SECRET` - Authentication secret (REQUIRED - generate a secure random value)
 - `DB_PASSWORD` - PostgreSQL password
@@ -432,6 +437,17 @@ FRONTEND_PORT=3002
 BACKEND_PORT=3003
 ```
 
+#### Docker Compose Variable Substitution Errors
+If you see warnings like:
+```
+WARN[0000] The "fgbf" variable is not set. Defaulting to a blank string.
+```
+
+This means your password contains `$` which Docker Compose interprets as a variable. Solutions:
+1. **Best**: Generate passwords without `$`: `openssl rand -base64 32 | tr -d '$'`
+2. **Alternative**: Escape `$` as `$$` in your .env file
+3. **Example**: `DB_PASSWORD=Pass@#$$fgbf` instead of `DB_PASSWORD=Pass@#$fgbf`
+
 #### Permission Errors
 ```bash
 # Fix ownership