well it depends where the tank is located and how often you are using the water but basically yes it will save you money.
I dont know what accounts for being costly for you as i have no real concept of prices for such things in the US but you may want to take a look at this link
Radiant Barrier Water Heater Tank Jacket
How Radiant Barrier works - Energy Efficient Solutions
Any insulation will help but ideally you want something that is going to reflect the heat back in just like a huge thermos. the first thing that springs to mind as a budget option is camping mats with a thermal backing they cost nothing really but if you have even sat or laid on one you will know how good they are for reflecting heat