"For the wages of sin is death, but the free gift of God is eternal life in Christ Jesus our Lord" (Rom. 6:23).
Many use this verse to show that we are saved by the grace of God and that there is nothing we can do to affect our salvation. That is, works (acts of obedience) are not necessary for salvation. We all recognize the fact that "all have sinned and fall short of the glory of God," so it is true that all are deserving of spiritual death. But those who say grace is unconditional try and say that those who believe it is conditional believe they can earn their salvation.
Let's assume for a moment that it is possible for one to live his entire life without sinning. Has that person earned heaven? Since he has not sinned, he is not due the wages of sin; therefore he does not deserve to go to Hell. But that is all. He has not earned eternal life. That is still a "free gift of God."
We must realize that we will never earn a home in heaven. But that does not mean God's grace is unconditional. He expects us to be obedient to him (yes, that means "works") in order to be saved. Jesus is "to all those who obey Him the source of eternal salvation" (Heb. 5:9).
Let us obey God faithfully in order to receive the free gift of eternal life. But when we obey him, let us not think we've earned anything. Instead, let us have the servant's attitude commended to us by the Lord. "So you too, when you do all that things which are commanded you, say, 'We are unworthy slaves; we have done only that which we ought to have done'" (Lk. 17:10).