Are we really saved by faith alone, or are works necessary to salvation? Free Grace Theology would say faith is all that is necessary. Its opposite is Lordship Salvation, and its proponents would disagree, saying that works are evidence of salvation.
The Bible shows that both are correct. Faith is key, even in the Old Testament. Abraham’s faith and belief in God were “counted to him as righteousness” (Genesis 15:6; Romans 4:3; Galatians 3:6). At the same time, Old Testament passages indicate that doing God’s will shows our love for Him (Deuteronomy 11:1; Joshua 22:5; Isaiah 56:6-7). In the New Testament, passages like Ephesians 2:8-9 make it clear that we are saved by God’s grace through faith in Christ, not works. But the book of James shows that true faith is shown through works (James 2:14-17). The debate is a secondary issue, but either theological view can become unbiblical when taken too far.
Jesus said, "Not everyone who says to me, 'Lord, Lord,' will enter the kingdom of heaven, but the one who does the will of my Father who is in heaven" (Matthew 7:21). What then, is the will of the Father? The next verse tells us: "On that day many will say to me, 'Lord, Lord, did we not prophesy in your name, and cast out demons in your name, and do many mighty works in your name?' And then will I declare to them, 'I never knew you; depart from me, you workers of lawlessness'" (Matthew 7:22–23). How can people who prophesied and cast out demons and did mighty works in the name of Jesus be called 'lawless'? The key is in Jesus' words: "I never knew you." Their works could not save them because the “faith” they had was not saving faith. They “never knew” Jesus.
Works are a result of salvation, but they do not contribute to salvation. The thief on the cross, who Jesus saved at the last moment of his life, had no time to do any works. But if he had lived, he would have been sanctified, and his life would have become conformed to Christ's (Hebrews 10:10, 14). The Bible fully supports the idea that God's power is what saves us (Romans 1:16). It also fully supports the idea that "faith apart from works is dead" (James 2:26).
The Bible does not always bend to fit into the molds we prepare for it. Justification and sanctification are a package deal. You don't get one without the other. Free Grace theologians focus on justification, and Lordship Salvation theologians focus on sanctification, but none of us really knows what is happening in the heart of another person. We may not see sanctification taking place, but that doesn't mean that God is not working on that person. We may witness a conversion that seems utterly genuine but may be insincere. Rather than playing guessing games about others’ salvation, we should focus on our own justification and sanctification, which are both settled in Christ's blood (Matthew 7:1; Luke 6:37; Romans 5:1–5).