Your water heater is the second hungriest appliance in your house, beat only by the refrigerator. You can easily reduce the amount of energy your hot water heater uses and still keep a hot shower while saving money.

Most water heaters are set to 140 degrees F, when it only needs to be set to 120 degrees F. That is plenty hot enough for a shower and to kill any bacteria in the water heater tank.

For each 10 degrees that you turn your heater down, you will save 5% on the energy that it uses.

Most of the energy (up to 30%) used by your water heater is used to keep that huge tank of water hot at all times. You can reduce this by using a time-control switch or a heat trap.

Wrapping your water heater in an insulating blanket can save 5 to 10 percent or up to 465 pounds of carbon dioxide a year.

Another way to save energy is to wrap your hot water pipes in insulation foam. You earn back the cost of the insulation in a few years.

You can also buy a device that will preheat your water at the shower to reduce the amount of water when you run the shower waiting for it to warm up.

A heat trap which attaches to the pipe that leaves your water heater, will circulate the hot water through your tank and prevent it from going up into the pipes where it can cool. Heat traps can reduce your energy costs by 5 to 10 percent.

If you drain a quart of water out of the bottom of your water heater every three months, you can prevent sediment from building up and increase the efficiency of your water heater.

Getting a new water heater, especially if it is 10 years old or older, could save you substantial money. Be sure to get an energy-efficient model.