Water heating can account for 14%–25% of the energy consumed in your home. You can reduce your monthly water heating bills with these simple tips. Saving water also saves on water heating (and it saves on your water bill) so we’ve included tips for that as well.

1. Wash only full loads of dishes and clothes.
2. Wash your clothes on using cold water.
3. Lower the thermostat on your hot water heater to 120° F.
4. Consider natural-gas on-demand or tankless, natural gas water heaters. Researchers have found savings can be up to 30% compared with a standard natural-gas storage tank water heater.
5. Did you know that 85-90% of the energy from hot water is wasted when it goes down the drain? Consider installing a drain water waste heat recovery system.
6. Buy a new energy-efficient water heater. While it may cost more initially than a standard water heater, the energy savings will continue during the lifetime of the appliance.
7. Although most water heaters last 10-15 years, it's best to start shopping for a new one if yours is more than 7 years old. Doing some research before your heater fails will enable you to select one that most appropriately meets your needs.
8. Drain a quart of water from your water tank every 3 months to remove sediment that impedes heat transfer and lowers the efficiency of your heater.
9. Install heat traps on the hot and cold pipes at the water heater to prevent heat loss. Some new water heaters have built-in heat traps.
10. If you are in the market for a new dishwasher or clothes washer, consider buying an efficient, water-saving ENERGY STAR® model to reduce hot water use.
11. Insulate the first 6 feet of the hot and cold water pipes connected to the water heater.
12. Insulate your natural gas water heater’s storage tank, but be careful not to cover the water heater's top, bottom, thermostat, or burner compartment. 
13. Insulate your electric hot-water storage tank, but be careful not to cover the thermostat.
14. Take more showers than baths. Bathing uses the most hot water in the average household.
15. Repair leaky faucets promptly; a leaky faucet wastes gallons of water in a short period of time.
16. Install aerating, low-flow faucets and showerheads.
17. Select a shower head with a flow rate of less than 2.5 gpm (gallons per minute) for maximum water efficiency. Before 1992, some showerheads had flow rates of 5.5 gpm, so you might want to replace them if you're not sure of their flow rates.
18. Insulate your hot water pipes, which will reduce heat loss and can raise water temperature 2ºF–4ºF hotter than uninsulated pipes.
19. Don’t let water run while you are shaving. 
20. Don’t let water run while brushing your teeth.
21. Follow the old adage: “If it’s yellow let it mellow, if it’s brown wash it down.” The average toilet flush uses 3 gallons of water.
22. Place a half gallon milk jug filled with water and rocks in the back of your toilet. You’ll save a half gallon of water every time you flush.
23. Install a rain-catching barrel outside under you gutter’s downspouts and use the “free” water to water the lawn and/or plants.
24. Water the lawn in the early morning to prevent evaporation and give the lawn time to absorb the water. 
25. Most lawns only need an inch of rain a week, anything more is a waste and will just make you need to mow the grass more often.