Here are the cons: This particular barrel runs about $125. They can range anywhere from $30 to $300, depending on the capacity. Will you make up the cost on your water bill savings? Depends on much you're currently using water for your yard and how much your utility charges for water.
You have to protect most (maybe all) rain barrels from freezing, and they take up a lot of space in a garage. Mine won't fit through my attic opening. This past winter (in zone 7) I put two in the garage, and left the other one outside and upside down. It doesn't appear to have cracked at all, so maybe you just can't let them freeze with water inside them.
The water doesn't come out forcefully enough to power a sprinkler (and there's not enough water capacity for there to really be any point). I guess you could use a sump pump so you could actually spray the water, but then you're using more of one resource (electricity) to conserve another.
That water either puddles in your yard, or it washes off into the nearest storm sewer, putting a huge strain on your local infrastructure. If you use fertilizers or pesticides, those are washed off into the drain also, where -- depending on your city's water system -- it either goes straight into a river or has to get treated by your treatment facility.
A 1,000 square foot roof that gets 1 inch of rain puts off about 600 gallons of water.
All About Rain Barrels
Rain barrels are a great solution to this problem. I have 3 rain barrels like you see on the right, and they each hold 75 gallons. Rain barrels come in hundreds of shapes and sizes. I'll tell you about the the kind I have, including the cons, so you can decide for yourself if one would help you.
There are many ways you can set up your gutter to direct water to your barrel. You can buy a diverter that you attach to your existing gutter by removing a small section of it. It flips down when you want to send rainwater to your barrel, and can flip up when your rain barrel is full (you'll see later why this isn't necessary). Unfortunately, this diverter isn't long enough for my rain barrels, so I use a small piece of gutter on the end of the diverter. On two of my rain barrels, I take down the gutter and put up a half gutter, then attach a flexible diverter to that. There are other types of diverters available from various vendors as well.
Ideally you'll want to elevate your rain barrel, because you use the force of gravity to get the water out.
The rain barrel I have has a hose attachment with a flow-control nozzle. You can use the hose to fill watering cans or buckets, or you can attach it to a longer hose to water bushes and trees. Some types of rain barrels have a spigot at the bottom for filling watering cans.
Some rain barrels come with a screen to keep out animals, kids, mosquitos, debris from the roof, etc... Underneath the screen, you can see the cross bars, also designed to keep out anything large.
It works great for trees that need a lot of water. You can set the flow to a slow drip and leave it. If you forget about it, you'll only give it 75 gallons of water (or however much your model holds), and depending on the size of your bush or tree, that might be a reasonable amount of water.
Supposedly water from a rain barrel is better for plants than water from an outdoor faucet because rain water isn't chlorinated and it won't be shockingly cold in the heat of the summer. This sounds reasonable, but I can't swear it's true.
What happens when it rains too much and your barrel overflows? This model comes with a hose that you attach to the rain barrel and direct it where you want the excess water to go. A suspended tube inside the rain barrel directs the excess water to this spout. You don't have to have this hose attached -- the excess water will still come out, but since it's about a 1-2 foot drop to the ground, you could end up with an erosion problem. This model also has the option of buying a "linking kit", so you can link as many rain barrels as you have room for side by side. I haven't tried this yet.
I got my rain barrels online at Gardener's Supply Company (I was not paid in any way for this information -- they don't even know I've talked about their product), but there are several retailers available. Either do a search for "rain barrel", or try one of these vendors who appear to have good selections:
I hope this was helpful, and thanks for your interest in water conservation.