diff --git a/README.md b/README.md
index 38d1937..e3017ca 100644
--- a/README.md
+++ b/README.md
@@ -30,13 +30,29 @@ keep-derivations = true
 keep-outputs = true
 ```
 
+## Storing .direnv outside the project directory
+
+`.direnv` might interact badly with backups (i.e. Dropbox) or IDEs.
+Therefore it's possible to override in `$HOME/.config/direnv/direnvrc` or
+in own project's `.envrc` a variable called `$direnv_layout_dir`.
+The following example will create a unique directory name per project
+in `$HOME/.cache/direnv/layouts/`:
+
+
+```bash
+# $HOME/.config/direnv/direnvrc
+: ${XDG_CACHE_HOME:=$HOME/.cache}
+pwd_hash=$(echo -n $PWD | shasum | cut -d ' ' -f 1)
+direnv_layout_dir=$XDG_CACHE_HOME/direnv/layouts/$pwd_hash
+```
+
 ## Known Bugs
 
 At the moment nix-direnv depends on gnugrep and a modern bash version.
 This might lead to [problems](https://github.com/nix-community/nix-direnv/issues/3) on macOS.
 As a work-around we suggest to install direnv/grep via nix or homebrew.
 
-## Why not using lorri instead.
+## Why not using lorri instead?
 
 Lorri causes large CPU load when `$NIXPKGS` is pointed to a directory, i.e. a
 git checkout. This is because it tries to watch any referenced nix file and
diff --git a/direnvrc b/direnvrc
index 9083732..6ce7f0f 100644
--- a/direnvrc
+++ b/direnvrc
@@ -1,10 +1,9 @@
 # shellcheck shell=bash
 
-: "${direnv_layout_dir:=.direnv}"
-
 use_nix() {
-  local path
-  path="$(nix-instantiate --find-file nixpkgs)"
+  local path direnv_dir
+  path=$(nix-instantiate --find-file nixpkgs)
+  direnv_dir=$(direnv_layout_dir)
 
   if [[ "${direnv:-}" == "" ]]; then
     log_status "\$direnv environment variable was not defined. Was this script run inside direnv?"
@@ -24,7 +23,7 @@ use_nix() {
     fi
   fi
 
-  local cache="${direnv_layout_dir}/cache-${version:-unknown}"
+  local cache="$direnv_dir/cache-${version:-unknown}"
 
   local update_drv=0
   if [[ ! -e "$cache" ]] || \
@@ -33,7 +32,7 @@ use_nix() {
     [[ default.nix -nt "$cache" ]] || \
     [[ shell.nix -nt "$cache" ]];
   then
-    [[ -d "${direnv_layout_dir}" ]] || mkdir "${direnv_layout_dir}"
+    [[ -d "$direnv_dir" ]] || mkdir "$direnv_dir"
     local dump_cmd tmp
     dump_cmd="echo -n _____direnv_____; \"$direnv\" dump bash"
     tmp=$(nix-shell --show-trace --pure "$@" --run "$dump_cmd" \
@@ -79,7 +78,7 @@ use_nix() {
 
   # This part is based on https://discourse.nixos.org/t/what-is-the-best-dev-workflow-around-nix-shell/418/4
   if [[ "${out:-}" != "" ]] && (( update_drv )); then
-    local drv_link="${direnv_layout_dir}/drv" drv
+    local drv_link="${direnv_dir}/drv" drv
     drv=$(nix show-derivation "$out" | grep -E -o -m1 '/nix/store/.*.drv')
     local stripped_pwd=${PWD/\//}
     local escaped_pwd=${stripped_pwd//-/--}