How does our good works go with God’s grace? Since God’s grace is God doing all the necessary work for our salvation, where does our good works fit in? I will put it simply like this and then explain:

God has done it; now we do it. 
 
What I don’t mean is since God has started it, we finish it. God didn’t start the salvation process, and then left it up to us to finish it. No. He not only started it, but He also finished it. Our salvation is entirely God’s doing. Then, what are we to work on? Where does our effort fit in? Or does it?
Consider these verses:
“For you have died, and your life is hidden with Christ in God.” Col. 3:3
“Put to death therefore what is earthly in you.” Col. 3:5
Verse 3 says that I’m dead to sin. But verse 5 says that I’m to put to death my sin. But how do you put to death that which is already dead?
Also consider: “I have been crucified with Christ, and I no longer live, but Christ lives in me. The life I now live in the body, I live by faith in the Son of God, who loved me and gave himself for me.” Gal. 2:20
Here too says that I’ve been crucified (dead), but “I live” by faith in the Son of God. What gives? How do we do this? Again, the phrase I try to remember is: God has done it; now we do it.
Probably the best illustration I can give is that you have been adopted by the King. You are a prince or a princess. But your lifestyle does not match your new identity yet. So, the rest of your life, you are living your life striving to match the new identity you have been given. Not in order to become a loyalty, but because you have already been made a loyalty.
God has done it. Now, you do it! But you can’t do it alone. You must depend on Him each step of the way.
PH