The tricky thing about these two often-confused words is that both can be used as a noun or a verb.
To affect (verb, pronounced ah-FECT) is to modify or change. "Lack of sleep affects my mood."
To effect (verb, pronounced the same) is to cause or bring about. "The new Congress will effect new policies."
An effect (noun, pronounced the same) is the result of something. "Working out has positive effects."
An affect (noun, pronounced AH-fect) is a demeanor or emotional state; it's the way one carries him or herself. "His positive, upbeat affect made him a favorite of the hiring committee."