diff --git a/resources/js/components/AppSidebarHeader.tsx b/resources/js/components/AppSidebarHeader.tsx
index 29a0c45..cfcc4d5 100644
--- a/resources/js/components/AppSidebarHeader.tsx
+++ b/resources/js/components/AppSidebarHeader.tsx
@@ -1,18 +1,41 @@
 import { Breadcrumbs } from '@/components/Breadcrumbs';
+import SettingsPanel from '@/components/SettingsPanel';
+import { Button } from '@/components/ui/button';
 import { SidebarTrigger } from '@/components/ui/sidebar';
 import { type BreadcrumbItem as BreadcrumbItemType } from '@/types';
+import { Settings } from 'lucide-react';
+import { useState } from 'react';
 
 export function AppSidebarHeader({
     breadcrumbs = [],
 }: {
     breadcrumbs?: BreadcrumbItemType[];
 }) {
+    const [settingsOpen, setSettingsOpen] = useState(false);
+
     return (
         <header className="flex h-16 shrink-0 items-center gap-2 border-b border-sidebar-border/50 px-6 transition-[width,height] ease-linear group-has-data-[collapsible=icon]/sidebar-wrapper:h-12 md:px-4">
             <div className="flex items-center gap-2">
                 <SidebarTrigger className="-ml-1" />
                 <Breadcrumbs breadcrumbs={breadcrumbs} />
             </div>
+
+            <div className="ml-auto flex items-center">
+                <Button
+                    variant="ghost"
+                    size="icon"
+                    className="h-9 w-9"
+                    onClick={() => setSettingsOpen(true)}
+                >
+                    <Settings className="h-5 w-5 opacity-80" />
+                    <span className="sr-only">Settings</span>
+                </Button>
+            </div>
+
+            <SettingsPanel
+                open={settingsOpen}
+                onOpenChange={setSettingsOpen}
+            />
         </header>
     );
 }
diff --git a/resources/js/components/SettingsPanel.tsx b/resources/js/components/SettingsPanel.tsx
new file mode 100644
index 0000000..9534dc2
--- /dev/null
+++ b/resources/js/components/SettingsPanel.tsx
@@ -0,0 +1,142 @@
+import {
+    Sheet,
+    SheetContent,
+    SheetHeader,
+    SheetTitle,
+} from '@/components/ui/sheet';
+import { csrfToken } from '@/lib/utils';
+import { type SharedData } from '@/types';
+import { router, usePage } from '@inertiajs/react';
+import { useState } from 'react';
+
+type SaveStatus = 'idle' | 'saving' | 'success' | 'error';
+type DistributionMode = 'even' | 'priority';
+
+interface DistributionOption {
+    value: DistributionMode;
+    label: string;
+    description: string;
+}
+
+const distributionOptions: DistributionOption[] = [
+    {
+        value: 'even',
+        label: 'Even Split',
+        description:
+            'Split evenly across buckets in each phase, respecting individual capacity',
+    },
+    {
+        value: 'priority',
+        label: 'Priority Order',
+        description: 'Fill highest-priority bucket first, then next',
+    },
+];
+
+interface SettingsPanelProps {
+    open: boolean;
+    onOpenChange: (open: boolean) => void;
+}
+
+export default function SettingsPanel({
+    open,
+    onOpenChange,
+}: SettingsPanelProps) {
+    const { scenario } = usePage<SharedData>().props;
+    const [saveStatus, setSaveStatus] = useState<SaveStatus>('idle');
+
+    if (!scenario) return null;
+
+    const handleDistributionModeChange = async (value: DistributionMode) => {
+        if (value === scenario.distribution_mode) return;
+
+        setSaveStatus('saving');
+        try {
+            const response = await fetch(`/scenarios/${scenario.id}`, {
+                method: 'PATCH',
+                headers: {
+                    'Content-Type': 'application/json',
+                    'X-CSRF-TOKEN': csrfToken(),
+                },
+                body: JSON.stringify({ distribution_mode: value }),
+            });
+
+            if (!response.ok) throw new Error('Failed to update');
+
+            setSaveStatus('success');
+            router.reload({ only: ['scenario', 'buckets'] });
+            setTimeout(() => setSaveStatus('idle'), 1500);
+        } catch {
+            setSaveStatus('error');
+            setTimeout(() => setSaveStatus('idle'), 1500);
+        }
+    };
+
+    return (
+        <Sheet open={open} onOpenChange={onOpenChange}>
+            <SheetContent side="top" className="px-6 pb-6">
+                <SheetHeader>
+                    <SheetTitle>Settings</SheetTitle>
+                </SheetHeader>
+
+                <div className="mx-auto max-w-2xl">
+                    <fieldset disabled={saveStatus === 'saving'}>
+                        <legend className="text-sm font-medium text-foreground">
+                            Distribution Mode
+                            {saveStatus === 'success' && (
+                                <span className="ml-2 text-green-600">
+                                    Saved
+                                </span>
+                            )}
+                            {saveStatus === 'error' && (
+                                <span className="ml-2 text-red-600">
+                                    Failed to save
+                                </span>
+                            )}
+                        </legend>
+                        <p className="mt-1 text-sm text-muted-foreground">
+                            How income is divided across buckets within each
+                            phase
+                        </p>
+                        <div className="mt-3 space-y-2">
+                            {distributionOptions.map((option) => (
+                                <label
+                                    key={option.value}
+                                    className={`flex cursor-pointer items-start gap-3 rounded-lg border p-3 transition-colors ${
+                                        scenario.distribution_mode ===
+                                        option.value
+                                            ? 'border-primary bg-primary/5'
+                                            : 'border-border hover:border-primary/50'
+                                    }`}
+                                >
+                                    <input
+                                        type="radio"
+                                        name="distribution_mode"
+                                        value={option.value}
+                                        checked={
+                                            scenario.distribution_mode ===
+                                            option.value
+                                        }
+                                        onChange={(e) =>
+                                            handleDistributionModeChange(
+                                                e.target.value as DistributionMode,
+                                            )
+                                        }
+                                        className="mt-0.5"
+                                    />
+                                    <div>
+                                        <div className="text-sm font-medium">
+                                            {option.label}
+                                        </div>
+                                        <div className="text-sm text-muted-foreground">
+                                            {option.description}
+                                        </div>
+                                    </div>
+                                </label>
+                            ))}
+                        </div>
+                    </fieldset>
+                </div>
+            </SheetContent>
+        </Sheet>
+    );
+}
diff --git a/resources/js/lib/utils.ts b/resources/js/lib/utils.ts
index 61fbf3a..9ebe773 100644
--- a/resources/js/lib/utils.ts
+++ b/resources/js/lib/utils.ts
@@ -16,3 +16,11 @@ export function isSameUrl(
 export function resolveUrl(url: NonNullable<InertiaLinkProps['href']>): string {
     return typeof url === 'string' ? url : url.url;
 }
+
+export function csrfToken(): string {
+    return (
+        document
+            .querySelector('meta[name="csrf-token"]')
+            ?.getAttribute('content') || ''
+    );
+}
diff --git a/resources/js/pages/Scenarios/Show.tsx b/resources/js/pages/Scenarios/Show.tsx
index b65bbcf..725c59b 100644
--- a/resources/js/pages/Scenarios/Show.tsx
+++ b/resources/js/pages/Scenarios/Show.tsx
@@ -5,6 +5,7 @@ import { Button } from '@/components/ui/button';
 import InlineEditInput from '@/components/InlineEditInput';
 import InlineEditSelect from '@/components/InlineEditSelect';
 import IncomeDistributionPreview from '@/components/IncomeDistributionPreview';
+import { csrfToken } from '@/lib/utils';
 
 interface Scenario {
     id: string;
@@ -97,9 +98,6 @@ const formatAllocationValue = (bucket: Bucket): string => {
     return `$${centsToDollars(bucket.allocation_value).toFixed(2)}`;
 };
 
-const csrfToken = () =>
-    document.querySelector('meta[name="csrf-token"]')?.getAttribute('content') || '';
-
 const patchBucket = async (bucketId: string, data: Record<string, unknown>): Promise<void> => {
     const response = await fetch(`/buckets/${bucketId}`, {
         method: 'PATCH',