I draw each room to scale on graph paper, then measure my furniture and make paper cutouts of every piece. I did this before we moved into our current home, which was fantastic - I was able to tell the movers exactly where to put everything.

This question is asked frequently. Sketchup and Homestyler are the ones I always recommend but others have posted different ones.

I use tracing paper and Pentel mechanical pencils.

I bought Home Designer Suite software. Upload a picture of your floor plan into the program and draw the walls on top of the image of your floor plan (like tracing). Once you are finished, you can see it in 3D. 3D is hugely helpful in gauging things like spacing between items. You can try to rely on "rule of thumb" distances between things. But for me, seeing (in 3D) is believing. It is also more personal to your tastes. For example, Europe has totally different acceptable distances for kitchen walkways/between islands/etc. Best I can figure is because they have small kitchens in general.

Anyway, the software program is relatively cheap, not too hard to use, and very helpful in my opinion.