As the Reformers said:
We are saved by grace alone, through faith alone, in Christ alone.
But what exactly did they mean when they said "by grace alone"?
In the year 2000, John MacArthur wrote what I consider to be the single best, brief expository on Biblical grace. He warned us back then that "the tendency to cheapen grace has eaten its way into the heart of evangelical Christianity". Now, fifteen years later, when so many have distorted the true meaning of Biblical grace, I've reproduced his original writing below in entirety:
Cheap grace means grace as a doctrine, a principle, a system. It means forgiveness of sins proclaimed as a general truth, the love of God taught as the Christian "conception" of God. An intellectual assent to that idea is held to be of itself sufficient to secure the remission of sins. The Church which holds the correct doctrine of grace has, it is supposed,a part in that grace. In such a Church the world finds a cheap covering for its sins; no contrition is required, still less any real desire to be delivered from sin. Cheap grace therefore amounts to a denial of the Incarnation of the Word of God.
Cheap grace means the justification of sin without the justification of the sinner. Grace alone does everything, they say, and so everything can remain as it was before. "All for sin could not atone." The world goes on in the same old way, and we are still sinners "even in the best life" as Luther said. Well, then, let the Christian live like the rest of the world, let him model himself on the world's standards in every sphere of life, and not presumptuously aspire to live a different life under grace from his old life under sin ([New York: Collier, 1959], 45-46).