New to the game, my wife and daughter are enjoying playing - it's rare to find a game we all enjoy.

A question came up: The text of this item reads "Effects cannot cause you to discard your Clues unless you choose to."

What, exactly, is an "effect"? Effect of the consequence of using a spell (the flip side), a Mythos effect?

Or are we reading too much into this and the owner the item never has to discard a Clue, except by choice?

It's anything triggered by the game. For example, failing a check during a Mythos phase could you result in losing a clue. Scribe's Journal grants you immunity from this. And so on. Basically, every time you're prompted instructions to lose clues, you don't lose any, unless you're willing to. When are you willing to, then. Well, for example spending clues during test resolutions to change investigation results to successes is a voluntary action, thus, you wanna trigger that effect, you pay the clue cost.

Hope this makes sense

perfect sense - thank you