diff --git a/cointop/common/pathutil/pathutil.go b/cointop/common/pathutil/pathutil.go
index def97a9..58bb4e3 100644
--- a/cointop/common/pathutil/pathutil.go
+++ b/cointop/common/pathutil/pathutil.go
@@ -8,27 +8,35 @@ import (
 )
 
 // UserPreferredHomeDir returns the preferred home directory for the user
-func UserPreferredHomeDir() string {
+func UserPreferredHomeDir() (string, bool) {
 	var home string
+	var isConfigDir bool
 
 	if runtime.GOOS == "windows" {
 		home = os.Getenv("HOMEDRIVE") + os.Getenv("HOMEPATH")
+		isConfigDir = false
 	} else if runtime.GOOS == "linux" {
 		home = os.Getenv("XDG_CONFIG_HOME")
+		isConfigDir = true
 	}
 
 	if home == "" {
 		home, _ = os.UserHomeDir()
+		isConfigDir = false
 	}
 
-	return home
+	return home, isConfigDir
 }
 
 // NormalizePath normalizes and extends the path string
 func NormalizePath(path string) string {
 	// expand tilde
 	if strings.HasPrefix(path, "~/") {
-		path = filepath.Join(UserPreferredHomeDir(), path[2:])
+		home, isConfigDir := UserPreferredHomeDir()
+		if !isConfigDir {
+			path = filepath.Join(home, path[2:])
+		}
+		path = filepath.Join(home, path[10:])
 	}
 
 	path = strings.Replace(path, "/", string(filepath.Separator), -1)
diff --git a/cointop/common/pathutil/pathutil_test.go b/cointop/common/pathutil/pathutil_test.go
new file mode 100644
index 0000000..8f13463
--- /dev/null
+++ b/cointop/common/pathutil/pathutil_test.go
@@ -0,0 +1,22 @@
+package pathutil
+
+import (
+	"os"
+	"path/filepath"
+	"testing"
+)
+
+// TestNormalizePath checks that NormalizePath returns the correct directory
+func TestNormalizePath(t *testing.T) {
+	cases := []struct {
+		in, want string
+	}{
+		{"~/.config/cointop/config.toml", filepath.Join(os.Getenv("XDG_CONFIG_HOME"), "/cointop/config.toml")},
+	}
+	for _, c := range cases {
+		got := NormalizePath(c.in)
+		if got != c.want {
+			t.Errorf("NormalizePath(%q) == %q, want %q", c.in, got, c.want)
+		}
+	}
+}