The first step in saving water is to increase your household's water efficiency. Many water districts offer free water saving products, like low flow shower heads, and garden hose shut off valves. Check your local district for more info.
In the United States, the Department of Energy adopts standards for maximum allowable flow rates in fixtures (faucets are 2.2 gpm and toilets are 1.6 gallons/flush) to reduce water use. Currently there are ultra low flow options, like 0.6 gallon flush toilets and 1 gallon per minute shower heads.
According to the EPA, most homes could save about $170 per year by switching to water efficient appliances. This alone could offset the "need" for costly and environmentally destructive sources of water, such as new dams, more river diversions, and desalination plants.
Saving water also saves energy. American public water supply and treatment plants use 56 billion kilowatt-hours per year, enought to power 5 million homes for the year.
For more info see the EPA's Water Sense site.
1. Shower shut-off valves: Using a shower shut-off valve can reduce shower water use by 50%.
How it works: Install a manual shut off valve on the shower head that allows you to turn the water on and off with out changing the temperature control knobs. This allows you to easily turn the water off and on the water between soaping and rinsing.
2. Collect "clear water" in bucket in the shower, while it's heating up.
3. Flush toilet with bucket fulls of shower water (by pouring the water into the bowl of the toilet causes it to flush).
4. Siphon bathtub/shower water out of the window onto plants outside.
Install dual flush or 0.6 flush toilets
Home made low flow toilet. Put a river rock or plastic bottle weighted down with water and rocks in the toilet tank reservoir.
Install a recirculating pump to avoid loosing water as you wait for it to heat up.