You're starting to notice that the hot water just isn't lasting like it once was. It's hot enough, but runs out quicker than you remember. If you are finding you have less and less hot water, its time to see what the problem is. It's the kind of mystery that professional Plumbing Detectives (http://www.plumbingdetectives.com.au/) are used to seeing, and they have a few tips of advice.
It could just be your imagination that your hot showers seem to be shrinking. Get a timer going and actually measure how long your hot water is lasting. The reduction may not be as significant as you think. Also, ask if someone else in the home has recently done something to use up water that you don't know about. Your hot shower might have gotten cut short because the dishwasher started up a load.
Check the Tank
Since the temperature seems to still be properly hot at first, you know that the element in your tank is at least still functioning. The catch is figuring out why there is less of it. Chances are there is a problem with the upper heating element. The lower one is working fine, which is why the water first out of the tank is flowing nice and hot. But the water at the top of the tank is not hot, so you run out of heat in a much shorter period of time.
Another symptom of this would be that you seem to have more hot water first thing in the morning, or after a period of non-use. That's because the single element takes a long time to heat up the whole tank, meaning you do have more hot water after the tank has been sitting for a while.
Replacing the element in a hot water tank isn't a simple job though someone handy with tools should be able to do it. Otherwise, call a professional plumber to have a look. It's still going to be cheaper for you than replacing the entire tank.
Once the professional has taken a look, and if you do need to replace the entire tank, take a little time to get the right size system to make sure you have adequate hot water in the future.
Reduce Your Usage
If your tank is fine and you're finding that your hot water volumes just aren't quick enough due to increased usage in your home, there are a few other things you can do to make it last. A common way to be more efficient with your hot water is to replace your shower heads with low-flow models. It doesn't actually change how much hot water you have on hand, but does stretch it out longer.
Get More Hot Water
Sometimes its not about a slow reduction of hot water over time. Sometimes it's simply that there isn't enough in the tank for all the people and tasks. When you suddenly realize that you simply do not have enough hot water to go around, time to improve your system. Perhaps a tankless (on-demand) hot water system would give you the amounts you need without waiting for the tank to heat up again.