Many water heaters default to 140-degrees Fahrenheit (60 degrees Celsius) when they ship from the manufacturer, but temps that high pose not only high energy costs but scalding risks to your family. Most water heaters operate just as efficiently at 120-degrees Fahrenheit (49 degrees Celsius), and the lower temperature could help increase the lifespan of the heater.
For every 10 degrees you lower the water temperature, can save between 3 and 5 percent in utility costs. Additionally, wrapping an insulating blanket around your water heater will help save energy this winter, possibly as much as 4 to 9 percent in water heating costs. Find them in your local hardware store.