It is crucial for us to understand what grace is, because it is by grace that God saves us. In the world, people understand different things by 'grace'. But when we want a biblical meaning, there are two places that we can learn from. "For by grace you have been saved through faith; and that not of yourselves, it is the gift of God; not as a result of works, so that no one may boast" (Ep.2:8,9). "Therefore let us draw near with confidence to the throne of grace, so that 1) we may receive mercy and 2) find grace to help in time of need" (He.4:6). Grace is how God saves us, and it takes away from our side all reason to boast. He gives us salvation as a gift, and it is not something we earn from our efforts. One way grace acts is by giving us mercy from God for the forgiveness of our sins, and it is also by helping us in various forms when we are in need.
In the world, sometimes grace is used to refer to giving some extra marks to a student to help him to reach the minimum required for passing. From there, some people get the idea that in a Christian context, God gives us grace to cover our lack so that we will always remain acceptable to Him. So they think that since we are under grace, we don't have to worry about our actual life. They think that we are 'under the blood' or 'covered by the blood' (which are unbiblical terms) with similar meaning as being under grace. But this is to misunderstand grace.
More commonly, there are people who exaggerate grace by emphasising the fact that under grace there will be nothing that we can boast of, and then thinking that therefore grace means that our salvation is entirely a work of God. He chooses unconditionally whom He must save, and then saves them without their having to do anything from their side. We can see immediately that this is wrong because salvation is by God's grace through our faith. Faith is our response to this offer of grace. It is not a work that we do about which we can boast. But when we realise how we stand hopeless before the holy God and hear the good news that Jesus has made a way to forgive and accept us, we respond by humbling ourselves and receiving it. We fully know we don't deserve it, and that there is nothing we can boast about.
When we understand grace like this, we will not want to take sin lightly and think that whatever we do, God's grace will cover it. "For the grace of God has appeared, bringing salvation to all men, instructing us to deny ungodliness and worldly desires and to live sensibly, righteously and godly in the present age" (Tit.2:11,12). God helps us by giving us understanding and empowering us to deny ourselves and to do His will (Php.2:12,13).
This is how God is able to justify us and then lead us into sanctification. If we misunderstand grace and assume that God will do everything for us, we stop short of responding to His work in us. Then, of course, He will not be able to produce the results that He wants to produce in us.
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