PostgreSQL: postgres does not know where to find the server configuration file.

I am trying to configure postgreSQL as my local development database.

when I run

brew install postgres

I get the following error:

 postgresql-9.3.5 already installed

In my Gemfile I have the pg in the gem list.

When I run

rake db:create:all

I get the following error:

could not connect to server: No such file or directory
Is the server running locally and accepting
connections on Unix domain socket "/tmp/.s.PGSQL.5432"?

My database.yml looks like the following:

development:
  adapter: postgresql
  encoding: unicode
  database: fls_development
  host: localhost
  pool: 5
  port: 5432

# re-generated from your development database when you run "rake".
# Do not set this db to the same as development or production.
test:
  adapter: postgresql
  database: fls_test
  pool: 5
  timeout: 5000

default: &default
  adapter: postgresql
  encoding: unicode
  pool: 5

also, similar to this post: How to configure PostgresSQL server on MacOS 10.8.5?, I get the following error when I just typ postgres

postgres does not know where to find the server configuration file.
You must specify the --config-file or -D invocation option or set the PGDATA environment variable.

I am confused because the solution to the aforementioned SO post recommends installing with Homebrew however I am pretty sure that is how I installed it.