In the majority of cases, water in the cabin is not a huge emergency as most leaks are typically small. However, large leaks that risk sinking your boat can happen. Knowing how to handle leaks is one of the safety topics covered in the ASA 103 test, and generally a good thing to know.
What to do if you discover a leak
The actions you take and what order you execute them in will depend on circumstances, but a good rule of thumb to first stop or slow major leaks by plugging them up using any means necessary, and then proceed to pumping. The faster you can do both of these things the better, so if you have crew members onboard make sure to alert them so that they can help with these tasks.
Identifying the source of the leak
If your boat has not had some kind of accident, such as running around, the most likely source of the leak will be the holes that already exist in your boat: the through-all fittings.
Through-all fitting leaks
These fittings are devices, usually a combination of threaded pipes and washers, which are secured to the hull and allow the flow of water into or out of the boat. Boats have through-all fittings both below and above the waterline, depending on their function. Over time, wear and corrosion can result in these failing and leaking. Below the water line through-all fittings, such as the engine coolant intake, are more likely to leak simply because of being below the water. A small open hole below the water line can introduce very large quantities of water into your boat very quickly, so again the priority should be to plug it up.
If you suspect the leak to come from a through-all fitting, you'll want to close them. Remember to turn off your engine before closing the engine raw-water seacock, as running the engine without access to water can cause it to overheat and become damaged.
Other types of leaks
If your boat has had some kind of collision, then common types of leaks may include the rudder stock and propeller shaft. Running around or colliding with another boat can damage these.
Dealing with the leak
Use whatever materials you have available to you to plug the hole. A quick setting repair putty can be used to patch up small leaks. For larger holes, it's a good idea to carry tapered wooden plugs that you can drive into the hole with the help of a hammer. You can also use rags if a plug is unavailable or does not fit. If the hole is large, cushions or mattresses can be used. To help slow the flow of water, you can also temporarily cover the hole up from the outside with the use of a sail. This is called fothering a hole. You can watch this Yatching Monthly's video on how to fother a sail on Youtube (begins at 8 minutes and 40 seconds). Finally, consider heeling the boat to try and keep the hole above the waterline if you can.
Once the leak is under control, focus on pumping or bailing the water out. If you have an automatic bilge pump, make sure it's turned on and working properly and not getting clogged. If you have a manual pump, have another member operate it while you plug the leak. If needed, you can bail water out manually using a bucket.
Getting help
If you cannot stop the leak and your life is therefore in danger, call for help. Boats are very buoyant and people have often been surprised at just how long a boat can stay afloat even when there is a lot of water in it, so don't abandon ship too quickly. If water is coming in over the rail, however, it is a sign your boat is likely beyond a point of no return and will probably sink despite your best efforts. Until then, do everything you can to stop the leak, get the water out, and get someplace safe.