Have you ever wondered if you can save money by reducing your monthly utility bills? Your water heater is a large contributor to your energy bill (about 25%) so if you can conserve energy or replace your system with a more cost effective model, you'll be able to directly impact your monthly expenses. Your water heater uses energy every time you use hot water to wash your hands, run your washing machine, or take a shower. Tankless water heaters are more energy efficient by design since fuel is only used when hot water is needed. But traditional heaters use energy throughout the day just to keep the water heated until there's a demand. 5 Tips to Save Money on Your Utility Bills Quick Navigation Tip 1: Buy a New Energy-Efficient Water HeaterTip 2: Insulate your Water HeaterTip 3: Reduce the ThermostatTip 4: Reduce your Hot Water UsageTip 5: Perform Regular Maintenance Here's a few tips and tricks that you can use with a tank-style water heater to save money, and best of all, some may even extend your heater's service life! Tip 1: Buy a New Energy-Efficient Water Heater Each year water heaters become more energy efficient. If your water heater is nearing old age (the average life of a water heater is 8 to 12 years), you may want to consider a water heater replacement.Tankless water heaters are extremely energy efficient, although they are more expensive to purchase and install.Check Out Our Buyers Guides:Tankless vs Tank Style Buyers GuideGas Water Heater Installation Guide Electric Water Heater Installation Guide Tip 2: Insulate your Water Heater Wrapping your water heater in a cosy insulated blanket will help keep standby heat from escaping. Standby heat loss is the energy lost in keeping the water hot while it's in the tank waiting to be used. Heat is lost through the sides, bottom and top of the water heater. With gas fuelled heaters, heat can also escape thru the flue pipe.Its estimated that 15 to 30% of the energy a traditional water heater uses is needed to keep the water hot while it waits for a faucet to open. In fact, a heater can fire up to 3x's a day to compensate for standby heat losses!Insulating your water heater will help prevent heat loss. You can wrap your tank yourself or purchase a pre-made jacket. Just be sure you buy the right size for your heater. If your tank size is 40 gallons, you'll need a 40 gallon jacket.Since less power is used to keep the water at the set temperature, you'll definitely see savings on your utility bill. As a general rule, this tip will cover the cost of a jacket within a year! Learn More About Insulation Jackets Tip 3: Reduce the Thermostat When the temperature of the water within the tank falls below the temperature set on the thermostat, a water heater will power on to bring the water back to the set temperature. Turning down the thermostat will allow the water heater to use less power since it won't be heating the water as hot.The consumer product safety commission recommends setting the temperature to 120°F. Frequently, the factory setting is at 130°F, but turning it down just 10°F can reduce your operating costs by as much as 3-5%.Reducing the thermostat setting is one of the easiest ways to reduce your water heater's energy consumption. This simple tip can add up to as much as $72 in savings each year. Tip 4: Reduce your Hot Water Usage Reducing the amount of hot water you use will mean your water heater won't have as much cold water to heat. There are several things that you can change that'll have little to no impact on your daily routines.Use Cold Water to Wash Your Hands - This tip will not only save money thru the energy consumption of your water heater, but it will also reduce the overall water your household uses since you won't need to let the water run while you wait for it to heat. You can expect to save anywhere from 2 to 8 dollars a month.Install Dual Handle Faucets - You may not want to change all of your faucets right now, but if you are replacing a faucet due to wear or a remodel, a dual handle faucet can make a difference. These faucets prevent hot water from being drawn from the tank when you only need cold water. Surprisingly, on a single hand faucet, even if the handle is straight up, hot water is being drawn from the tank. This tip can save 2 to 8 dollars each month.Use Cold Water to Wash Your Clothes - Find a cold water detergent (many are available) to launder your clothes. This is an easy way to save up to $160 a year!Repair Leaks and Drips - Drips are not only annoying, they can cost you money. If you have a hot water faucet leak that drips once every second, it's costing you 2 to 4 dollars each month.Take Showers - On average, taking a shower will use 5 to 9 gallons of hot water, but a bath will use 12 to 15 gallons! Tip 5: Perform Regular Maintenance Performing regular maintenance on your water heater will not only extend the heater's service life, it will also save you money on your utility bills. Flushing the sediment from the tank and checking the anode rod ensures the water heater is operating efficiently.