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Stay out of the water!
Good advice is to stay out of the water whenever possible. Not only are you likely to lose a golf ball--they can cost more than $4 each--but there is also a penalty stroke to add to your score.
Back in the early days, the first rules simply said that if a player's ball goes into water or watery filth that he must allow his adversary a stroke and bring the ball behind the hazard.
Later, it became obvious that in some cases it was not practicable to drop a ball behind the water when the hazard ran along the side of the hole.
So there are water hazards, marked with yellow stakes or lines, and lateral water hazards, marked with red stakes or lines. The stakes or lines are in the hazard. A ball is in the hazard if any part of it touches the hazard.
The options when this happens are to go back and play a ball as nearly as possible from which the original ball was played, or to drop a ball behind the hazard, keeping the point where the ball last crossed the margin of the hazard--not the line of flight--directly between the hole and that spot.
In the latter case, there is no limit on how far behind the hazard the ball may be dropped. So it might be better to drop at a yardage you prefer or in the fairway, instead of the rough.
If a ball clears a water hazard, but rolls back in, the player still must go behind the hazard for his options.
There is an additional option available for a lateral hazard. A player may drop a ball within two-club lengths of, not nearer the hole, of the point where the ball last crossed the margin of the hazard. It is important to remember that a player may do this on either side of the hazard, equidistant from the hole.
It is possible that a player can drop a ball on the green when a lateral hazard is very close to the green.
Of course, a player can always try to play the ball from the hazard, but this is not always the wiser course of action.
If the ball remains in the hazard, the player then can resort to using one of the other options.
On some courses, there is the added option of ball drops where the player may drop the ball.
Environmentally-sensitive areas and even wild areas not defined as out of bounds are classified as lateral hazards on some courses.
Since a player does not have the option of identifying the ball in the hazard, there is no penalty if he plays the wrong ball. However, if he hits that particular ball back into the water, he can not claim that it was not his ball since he had used reasonable evidence that the ball was his.
There must be reasonable evidence that the ball is actually in a hazard. If there is a possibility that the ball may be in high grass out of the hazard, the player will have to use the lost ball penalty, going back to where he last played the original ball.
If a player finds his ball on the other side of the hazard after proceeding under one of his options, he can not play that ball. So it is wise to sometimes look first if there is any doubt.