Rain Barrels are a good start when it comes to conserving water. However greywater is a better overall solution.

Rain Barrels Disadvantages:
It doesn’t rain that much in areas that need it the most.
Only about 50 gallons of rainwater to use and then your back to using drinkable water.
Rain barrels have stagnant water that can cause mosquitoes.

Greywater advantages.
35 gallons a day per person
140 gallons a day for a family of four.
Greywater is a constant flowing system, very little to no change for mosquitoes.