If your water heater is warm to the touch and isn't insulated, it's wasting energy and costing you money. You can reduce these heat losses by 25 to 45 percent just by adding ... read full tip

If your water heater is warm to the touch and isn't insulated, it's wasting energy and costing you money. You can reduce these heat losses by 25 to 45 percent just by adding a pre-cut insulation jacket or blanket (make sure the insulation rating is at least R-8). These can be purchased at low cost from your local hardware store or utility company, and some utility companies will even install them at no extra charge.

The average household that adds an insulation blanket to its water heater can reduce water heating costs by 4 to 9 percent, or up to about $20 per year.

If every home water heater were insulated, the annual savings to U.S. residents would total more than $1 billion-enough to buy a high-end energy-efficient tankless water heater for every household in Chicago.