40 gallons should be fine for your small family.I would say you have a bad element or one needs adjusting.

Gas or electric?

Try raising the temp. just a bit, see if it helps. You may need it at about 130-140 degrees, see if it's any better. A 40 gallon should be plenty for two people if you give it a few minutes to recover between showers. I have seen 40 gallons in rental houses with 6-7 people living in them.

We have a 45 gallon electric WH. I take shower from 5:30-5:45, DD takes hers at 5:50 (and stays in for 30 minutes), DS takes one from 6:45-7:00,and DH from 7:15-7:25. No one ever complains about running out of hot water unless DH is taking cold showers and not saying anything :)

I would have the WH checked out. Could be a bad element or excessive sediment build up. If it is gas then it should recover even faster than electric. One caveat-we had a 70 gallon gas WH in our old home and the FIRST person to shower in the morning had lukewarm water because it heated from the bottom and drew water from the top. Used to make DH go first then-I like hot showers!

"We have a 45 gallon electric WH. I take shower from 5:30-5:45, DD takes hers at 5:50 (and stays in for 30 minutes), DS takes one from 6:45-7:00,and DH from 7:15-7:25."
This sounds like a super dooper highly organized household. No offense intended but I would go out of my friggin mind living that way!!!!!!!:-) "Times up, all plates in, if you're not finished try eating faster, gotta keep on schedule"! Showerer #1, On you mark, get set,,,,,,

Hey-you try to get five people (my youngest bathes at night) ready to leave the house by 7:40 for work and school. After 5 years of this we have the routine down pat. As for going out of Your mind, to each his own-

I included the times to illustrate that our tank isn't much bigger and is plenty big enough for us on a daily basis. Thought we were talking about water heaters here, not my organizational abilities? But thanks anyway, as a mother I take that as a compliment :)

I have GE 40 gallon Smartwater heater also, 2 people in the house + dishwasher. My wife can take shower for 10 minutes & I can take shower for ~10 minutes without us running out of H/W unless Dishwasher machine or Washer is on at the same time. In which case we might have to stop shower at 5 minutes as Dishwasher takes 10 gallons and a front-load washer takes 10 gal water each.[BTW If you have a top loader washer be advised it takes 30 gallons BY ITSELF to do one FULL load of clothes.] One of the reasons we switched to a front loader washer ....3 years ago. We are on well water too we need to conserve our water usage. Our dishwasher has feature allowing us to wash dishes 4-6 hours AFTER we load it; so generally it runs overnight when we are sleep and dishes are clean by next morning.Putting little to no demand on our Hot water usage management.

I only wash whites in hot water, or if some stuff got reall dirty. Otherwise it's always cold. It's better for clothes and it doesen't make my black stuff fade as quickly.

we have a 50 gal set at 130 degrees and seems to run out pretty quick. 2 20 min showers is about it... but we added an insulation blanket and insulated the HW pipes and lowered temp to 120 and it is the same now but less electricity. we also have a timer on the HW and noticed it stays hot longet with the insulation. we have timer on from 5-6am for me and wife and 5:30-7:30pm for kids and dishwasher. we still have enough hot water during the day to do some dishes by hand, or take 2 showers. we cut our electric bill by $30 a month by doing all this.

Get water saving showeheads (and 1.8 gallon toilets)--and turn the water off when you soap up, use the dishwasher once a day. I also have a high efficiency washer and dryer. Water is a precious resource, and so is energy. Conserve and use both sparingly.

You do realize this thread is over 11 years old right?