diff --git a/application.yml b/application.yml
index e69de29..2cba806 100644
--- a/application.yml
+++ b/application.yml
@@ -0,0 +1,12 @@
+# H2 Database Configuration (in-memory)
+spring.datasource.url=jdbc:h2:mem:testdb
+spring.datasource.driverClassName=org.h2.Driver
+spring.datasource.username=sa
+spring.datasource.password=password
+spring.jpa.database-platform=org.hibernate.dialect.H2Dialect
+spring.jpa.hibernate.ddl-auto=update
+spring.h2.console.enabled=true
+
+# Spring JPA settings
+spring.jpa.show-sql=true
+spring.jpa.properties.hibernate.format_sql=true