Heating water for a family of four can easily cost $30 per month. To keep these costs under control, maintenance is, again, very important. A common cause of excessive water heating cost is a water leak at the water heater, which could force the water heater to run almost constantly.
As in the HVAC system, the thermostat setting of a water heater is an important factor to consider. Lowering the thermostat to between 120° and 130° can not only save you money, it can also reduce the scalding dangers associated with very high temperatures.
To insulate water heaters there are relatively inexpensive water heater insulation blankets at home improvement stores. Also insulate the water lines leading from the tank for the first 3 feet with pipe wrap or tubular foam insulation.
One last way to save on the cost of heating water is to simply use less of it. Install low-flow shower heads, take shorter showers, and wash clothes in cold water when possible.