Got a water heater that's over seven years old? Here's a solution that could save you money on energy costs: Wrap your water heater in an insulation blanket. It'll save you roughly 1,000 lbs of carbon dioxide a year, and it'll cost you about $20-30 at your hardware store. If you have a newer water heater, it probably doesn't need one as these heaters come insulated.
Thinking about doing it? Here's a tutorial that shows you how to install it yourself.
Before & After: Emily Henderson Transforms a Senior's Studio Space
Monica & Austin's Charming Bungalow
Good Food to Share 
The Big Book of Small, Cool Spaces 
Apartment Therapy Presents 
The Eight-Step Home Cure 
Ercol Bar Stool
How To Cook Fluffy, Tasty Quinoa
True Greek Recipe: Paximadi Bread Salad with Tomatoes, Feta and Capers
P.S.-- Make sure your kit is appropriate for the type of water heater that you have. I currently have a role of heater insulation material that I can't install because it is incompatible with our gas heater.
I just got a new hot water heater installed this AM and had a "blanket" on my old one. Asked the plumber if I should get a new one and put it on, he said no, new one is insulated, plus it's in the garage, away from the exterior, so it wouldn't make much difference in my case, but more important when it's in a closet outside the house. I wanted to get a tankless, but we couldn't find the 3/4" gas line to be able to hook it up (I'm in a condo with 4 total units). Luckily, we anticipated going tankless in my parents' house and he set it up for that so when theirs dies, Mom and Dad are going tankless. Tankless would have been about 400 bucks more for me and I would have done it if we could have found the proper supply line.