“For by grace you have been saved through faith, and that not of yourselves; it is the gift of God, not of works, lest anyone should boast. For we are His workmanship, created in Christ Jesus for good works, which God prepared beforehand that we should walk in them.” (Ephesians 2:8-10 NKJV).

What is “grace?” Someone has said it is about “mercy, not merit.” This is true, yet grace is more than mercy. For mercy only withholds punishment. But grace forgives and adopts. Grace not only withholds what we do deserve, it gives us what we don’t deserve. For grace changes our status from rebel to righteous, from criminal against God, to child of God. Grace is the basis for our salvation (“by grace you have been saved”).
 
What is “faith?” It is trusting in the grace of God. Faith is the hand that takes hold of God’s gift, which is Christ Jesus, who died for our sins, was buried and raised on the third day. Yet, even this “hand” is a gift, for didn’t the God of grace also give us the “hand” of faith? So, do not make too much of your faith. It’s nothing to “boast” about. Even a child has the faith to open a gift. Therefore, if you boast, boast in the grace of God, which is Christ Jesus, our Lord!
 
So, if grace is the basis for our salvation and faith the means by which we receive it, then where do “good works” belong? If grace is the steam engine of salvation and faith is the coal car, then good works is the caboose. For good works follow salvation, but do not have the power to accomplish it. Good works are the evidence of salvation. They are the fruit on the branch that has been grafted into the Vine, which is Christ.