Rain barrels are becoming a popular commodity for backyard gardeners. They are an excellent way to reduce the cost of water usage for your lawn and garden. By collecting your rain water, you can save up to 40% of your total water use during the hot, summery months (1) or roughly 1300 gallons of water. Collecting rain from downspouts diverts stormwater away from sewer drains alleviating sewer overflows or localized flooding. It also prevents any unwanted discharges of pollutants in our water systems caused by stormwater runoff. A sustainable win-win.

From http://www.reducethejuice.ca/about-us/the-blue-barrel

Rain barrels come in all shapes and sizes. The most common rain barrels are large 55 gallon PVC drums which are on the more affordable end of the cost spectrum. Craigslist.com has a good amount of people trying to sell off these kinds for up to 25$ or so, depending on the city you live. These drums are great for people who love DIY and putting their personal touch on them. You can easily go online and look up ways to install spouts for cheap and as well design ideas to paint on them (a good video to watch). Then there is the more specialized stores that sell designer barrels that don’t even look like barrels! These can cost anywhere from 60$ and up. In the end, a rain barrel is going to do what any rain barrel does which is to hold water. It is a matter of how much you are willing to pay for it.

Picture from Woodland Direct

Some things to keep in mind about rain barrels:
1. Open water allows insects, especially mosquitoes, to get in. Opt for some sort of mesh to cover openings.
2. There is a lack of research in the quality of rain water in a rain barrel. Therefore, the water should not be consumed by human or animal or be used to water your vegetable/fruit garden (2).
3. Water pressure is not going to be as high as what you would get directly out of your spout.
4. You might need a crash course on disconnecting your downspout. An example of one is here.
5. Check with your local municipality for rebates or discounts for rain barrels. 
6. Make sure your rain barrel is secure at all times.

1. http://www.epa.gov/Region3/p2/what-is-rainbarrel.pdf
2. http://www.extension.umn.edu/environment/00023.pdf
3. http://www.portlandoregon.gov/bes/article/182095