It is a common struggle (in both theology and in practice) to try to balance the roles of God's grace and our effort in sanctification. Errors of license and/or legalism abound wherever people emphasize one at the expense of another!
Whenever I consider this tension between relying on grace and exerting effort, I find myself going to back to Titus 2.
In Titus 2, the Apostle Paul writes about godly living that "accords with" and "adorns" sound doctrine. In the first ten verses, he gives examples of what godly living looks like for different people. In verses 11-14, he goes into detail about the doctrine that underlies said lifestyle.
With the phrase "For the grace of God has appeared" (v11), Paul makes it clear that the Gospel is subject of this passage. It is in the Gospel - God breaking into history to redeem His creation by the person and work of Jesus Christ - that His grace is explicitly and effectually revealed, and His grace revealed therein is the overarching theme of the "doctrine of God our savior" and the godly life that "adorns" said doctrine. That being said, there are two resulting actions flowing from the appearance of grace.
Saving (and Training!) Grace
First, we see God's grace bringing salvation for all men. Because God's grace has appeared, God's plan of redemption is in progress, regeneration and reconciliation are possible, and people from every tribe and tongue will be saved. It is the grace of God that is bringing salvation; we could never obtain it on our own.
Second, we see God's grace training us. (When was the last time you sang about "Amazing Grace" that trained a wretch like me?) There are two complementary "training courses," if you will: God's grace is training us to renounce our old way of life and to live a new kind of life. The point is that it is the grace of God that is training us; we could never learn to do these things on our own.
Did you catch that?
Here is why I get so excited about this passage: "the grace of God" is the subject of this passage - grace is the main actor. And this passage is clearly revealing that grace is responsible for our salvation in its entirety: we need grace to save us and to train us. But wait! Who is doing the "renouncing" and the "living"? "Us." We are. Grace is not renouncing ungodliness and worldly passions or living self-controlled, upright, and godly lives - we are, as a response to the training of the grace of God.
So what does this mean? This means that God gets all the credit, because it is His grace making salvation and the resulting life change possible. This also means that we have work to do, as we participate in His "training program."
Two key words in this passage help to illustrate what this looks like in "real life."
One is the word training itself. This idea may be thought of in the same sense that a parent "trains" (raises) a child. There are some times when parents have to sit their kid down and have a talk (think of those times when the Spirit convicts you through the preaching of the Word or the biblical counsel of a friend). There are also times when parents have to potty train their kids, or train them how to ride a bike, or teach them to tie their shoes (compare those "hands-on" lessons to the times when God brings events and circumstances into your life that lead you to renounce ungodliness and/or live godly in a fresh new way). The parents get the credit for raising the child, but it is the child who has to act on/put into practice the lessons being taught.
We apply this concept of training by constantly, prayerfully evaluating our lives to see how God wants to teach us and refine us so that we may adjust our lives accordingly!
The other key word is waiting. This describes our mentality through this whole saving and training process that God's grace is taking through. Don't be mistaken! "Waiting" is not a passive, inactive mentality. It is an eager, hopeful, active trust that has Christ and His return as its object! Why is this our "blessed hope"? Well, just as God's grace appeared in Christ's first coming by His humiliation, death, and resurrection, so God's glory will appear in Christ's second coming by His visible, physical triumph and reign. He is our God (!) and Savior - which brings this whole discussion full-circle to the gospel.
We apply this concept of waiting as we look to the reality that He has redeemed us from all lawlessness (making it possible to renounce ungodliness and worldly passions!), that He has purified us for His own possession (making it possible for us to live self-controlled, upright, and godly lives!), and that He is coming back to reign in all His glory (making final victory assured). This is Christ-centered, gospel-saturated living!
So instead of trying to balance grace and effort, try to connect them! Without the former, we become legalists, either puffed up at our self-righteous deeds or frustrated because we are cut off from the means and motivation for godliness. Without the latter, we become worthless and ineffectual, missing the point for which grace was shown to us.