diff --git a/.planning/phases/05-template-data-model-and-api/05-CONTEXT.md b/.planning/phases/05-template-data-model-and-api/05-CONTEXT.md
new file mode 100644
index 0000000..0ad2516
--- /dev/null
+++ b/.planning/phases/05-template-data-model-and-api/05-CONTEXT.md
@@ -0,0 +1,115 @@
+# Phase 5: Template Data Model and API - Context
+
+**Gathered:** 2026-03-12
+**Status:** Ready for planning
+
+
+## Phase Boundary
+
+Backend infrastructure for the template system — new DB tables (templates, template_items), migration to add item_tier to budget_items, and REST endpoints for template CRUD and budget-from-template generation. No frontend changes in this phase. One-off items are excluded from templates at the data layer.
+
+
+
+
+## Implementation Decisions
+
+### Item type storage
+- New PostgreSQL ENUM `item_tier` with values: `fixed`, `variable`, `one_off`
+- Added as column on `budget_items` table via migration 002
+- Existing budget items default to `'fixed'` (they were created via copy-from-previous, treating all as recurring)
+- Column named `item_tier` (not `item_type`) to avoid collision with existing `category_type` field on BudgetItem
+- Settable via existing `POST /api/budgets/{id}/items` and `PUT /api/budgets/{id}/items/{itemId}` endpoints — optional field, defaults to `'one_off'` for new items
+
+### Template ownership
+- One template per user — `templates` table with UNIQUE constraint on `user_id`
+- Lazy creation: template auto-created when user first adds a template item (POST /api/template/items)
+- GET /api/template returns `{ "id": null, "items": [] }` when no template exists
+- Template auto-named "My Template" on creation; user can rename via PUT /api/template
+
+### Template item data model
+- `template_items` table: id, template_id (FK), category_id (FK), item_tier, budgeted_amount (NULLABLE), sort_order, created_at, updated_at
+- Fixed items: category + budgeted_amount set
+- Variable items: category + budgeted_amount NULL
+- CHECK constraint on template_items: `item_tier IN ('fixed', 'variable')` — one_off cannot exist in templates (DB-level enforcement)
+
+### Generation endpoint
+- `POST /api/budgets/generate` with body `{ "month": "2026-04", "currency": "EUR" }`
+- Single atomic transaction: creates budget + all template-derived items together
+- Fixed items generated with their template amounts; variable items generated with budgeted_amount = 0
+- Returns 201 Created with full BudgetDetail response (same shape as GET /api/budgets/{id})
+- Returns 409 Conflict with `{ "error": "budget already exists", "budget_id": "..." }` if budget for that month exists
+- If user has no template: creates empty budget with zero items (no error)
+- Budget auto-named from month using user's preferred_locale (localized month name + year, e.g. "April 2026")
+- Start/end dates computed from month parameter (first and last day of month)
+
+### API routes
+- Singular `/api/template` (one template per user, no ID needed):
+ - `GET /api/template` — get template with items (joined category name, type, icon)
+ - `PUT /api/template` — update template name
+ - `POST /api/template/items` — add item (auto-creates template if needed)
+ - `PUT /api/template/items/{itemId}` — update item
+ - `DELETE /api/template/items/{itemId}` — remove item
+ - `PUT /api/template/items/reorder` — batch update sort_order
+- Generation: `POST /api/budgets/generate` (under budgets, since the output is a budget)
+
+### API response shape
+- `item_tier` always included in budget item JSON responses (additive, non-breaking)
+- Template GET response includes joined category details: category_name, category_type, category_icon
+- Generation endpoint returns standard BudgetDetail shape
+
+### Claude's Discretion
+- Go struct design for Template and TemplateItem models
+- Exact migration SQL structure and index choices
+- Handler implementation patterns (error messages, validation order)
+- Query function signatures and SQL query structure
+- Month name localization approach (map vs library)
+
+
+
+
+## Specific Ideas
+
+- Migration defaults existing items to 'fixed' since the old copy-from-previous treated everything as recurring
+- Lazy template creation removes friction — user doesn't need to "set up" a template before using the app
+- 409 Conflict on duplicate month matches existing error patterns (409 for unique constraint violations)
+- Template response joins category details so Phase 6 frontend doesn't need extra API calls
+
+
+
+
+## Existing Code Insights
+
+### Reusable Assets
+- `models.go`: BudgetItem struct — add ItemTier field, BudgetDetail response shape reused by generation endpoint
+- `queries.go`: 22 existing query functions — CopyBudgetItems as reference for template-to-budget generation pattern
+- `handlers.go`: Handlers struct with queries dependency injection — add template handlers following same pattern
+- `router.go`: Chi router with auth middleware group — add `/api/template` route group and `/api/budgets/generate` endpoint
+
+### Established Patterns
+- PostgreSQL ENUM types (category_type) — same pattern for item_tier
+- User-scoped data isolation: all queries filter by userID from auth context
+- JSON serialization with `json:"field_name"` tags on structs
+- Error responses: `writeError(w, status, message)` helper
+- UUID primary keys with `uuid_generate_v4()` default
+- Decimal amounts via `shopspring/decimal` and `NUMERIC(12,2)` in PostgreSQL
+
+### Integration Points
+- `001_initial.sql` existing schema — new migration 002 adds item_tier column and template tables
+- `handlers.go` CreateBudgetItem/UpdateBudgetItem — add item_tier to request parsing and query calls
+- `queries.go` GetBudgetWithItems — add item_tier to SELECT and Scan
+- `router.go` protected routes group — add template routes and generate endpoint
+- `models.go` — add ItemTier type, Template struct, TemplateItem struct
+
+
+
+
+## Deferred Ideas
+
+None — discussion stayed within phase scope
+
+
+
+---
+
+*Phase: 05-template-data-model-and-api*
+*Context gathered: 2026-03-12*