Wrap the hot water tank with insulation. This is especially valuable for older water heaters with little internal insulation. Be sure to leave the air intake vent uncovered when insulating a gas water heater. Shortening shower time can also help. Simply reducing that lingering time by a few minutes can save hundreds of gallons of hot water per month for a family of four. Showers account for two-thirds of your water heating costs. Cutting your shower time in half will reduce your water heating costs by 33 percent.