Where should I store a custom ".my.cnf" file?
To keep the things simple place all custom server settings into the /etc/my.cnf file. Some user-specific options can be stored in the ~/.my.cnf where ~/ means "the homedir for the given system user". Also note the leading dot in the user-specific file name. That file is used for command-line client utilities like mysql or mysqldump only, not for server. Therefore the [mysqld] section can be completely omitted in the user-specific config file.