Also, insulate any exposed hot water lines in your home. The copper that is used for these lines wicks the heat right out of the water. This will help save you money because the water will retain its heat longer and you will not have to wait as long to get hot water out of your facet or shower, also saving you water.
If you want to save even more money and energy, try this little water heater trick. If your water can get scalding if allowed to fully warm up, you can definitely reduce the temperature on your water heater. Simply turn down the dial on the front of the unit until the output water is hot enough for dish washing and showering, but not hot enough to scald. This will again cause the unit to run less and waste less energy. Remember, the less energy that we all use reduces the demand on the energy companies and, thus, reduces the cost of energy for everyone!