I run my dishwasher in the mornings, and we take showers at night, so we only need hot water in my house from 7-8 am and 7-8 pm. If the water heater is running during any other time, we're just wasting energy. To my amazement, in the summer months, the left over hot water from our morning cycle lasted all day. I seriously thought the timer wasn't working. Just to test it, I purposely ran the hot water out to see if it would reheat before the next cycle. So, after running buckets of water back and forth to the plants outside like a crazy person trying not to waste the water I was allowing to gush from the faucet, my conclusion--my husband really did install the water heater timer properly.
The tank seems to be holding the hot water a little less as we're getting colder, but I am going to try to wrap it with some insulation and see if that helps. I'll keep you posted on that one.
There has been a fun little side effect too. We are all a little nervous about getting stuck in the shower outside of heating times, so our showers are getting shorter!! That was a huge part of the 20% decrease in our water bill.
You can get the timer at Home Depot for around $50. I didn't check around online, but I bet you might be able to get a good deal using Ebates or Cashbaq somewhere too.