Affect (verb) – to influence or change. e.g. Inflation always affects our level of income;  the divorce affected her very badly.

Effect (verb) – to bring about or cause.  e.g. The Internet has effected a complete change in the way we do business.

Effect (noun):  the result of some action.  The computer has had a profound effect on our lives. The effect of painting with light colours is that the room looks bigger.