diff --git a/CHANGELOG.md b/CHANGELOG.md
index 454d16293..79ad2dfad 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,3 +1,9 @@
+#### xxx: unreleased
+
+Fixes
+
+ - Create default setting.js in user-specified directory. Fixes #908
+
 #### 0.14.2: Maintenance Release
 
 Fixes
diff --git a/red.js b/red.js
index 1fb84eaf3..c703ae878 100755
--- a/red.js
+++ b/red.js
@@ -81,7 +81,7 @@ if (parsedArgs.settings) {
         // NODE_RED_HOME contains user data - use its settings.js
         settingsFile = path.join(process.env.NODE_RED_HOME,"settings.js");
     } else {
-        var userDir = path.join(parsedArgs.userDir || process.env.HOME || process.env.HOMEPATH || process.env.USERPROFILE,".node-red");
+        var userDir = parsedArgs.userDir || path.join(process.env.HOME || process.env.HOMEPATH || process.env.USERPROFILE,".node-red");
         var userSettingsFile = path.join(userDir,"settings.js");
         if (fs.existsSync(userSettingsFile)) {
             // $HOME/.node-red/settings.js exists