You Have Already Been Forgiven
 Forgiven: Your sins are already forgiven (2 Corinthians 5:19a). God has also "forgotten" them (Hebrews 8:12) in the sense that He will never hold them against you. Man-made religion is focused on sin and forgiveness; the Gospel that the Bible teaches is centered on new life in Jesus Christ. Jesus put away sin (Hebrews 9:26b) once for all time (Hebrews 7:27) and for all people (1 Peter 3:18). The long-standing myth that you must receive the gift of forgiveness by faith is not found anywhere in the Bible. It is the gift of righteousness that you must receive by faith in order to be saved (Romans 5:17).
Forgiveness was based on Christ's sacrifice (Hebrews 9:26b), not your response to it. Forgiveness is God's gift of grace to all people (Colossians 1:20; John 1:29; 1 John 2:2). Since the sins of all people for all time were forgiven on the Cross of Jesus Christ (Mark 3:28), you do not need to seek forgiveness from God (Hebrews 10:18). The reason this is important is that God does not want you to dwell on sin. Rather, God wants you to recognize that, as a believer, Jesus Christ lives in you, and that by His presence you are a righteous child of God in your new, born again heart (Hebrews 10:14; Romans 11:16). God also wants you to be occupied with the message of reconciliation, not with the sins of those who do not yet believe (2 Corinthians 5:20).
Unbelief is still the barrier, but for a different reason; unbelief is rejecting the eternal life that is found only in Jesus Christ.
How You are Saved
 Receiving a New Heart through Faith: All are forgiven but not all are saved. Only when your unbelief is turned to faith in Christ as Savior does God remove your old sinful inner nature and replace it with a brand new, clean heart (Ezekiel 36:26; Ezekiel 11:19; Romans 6:6).
Note for the Next Sections: "God's Spirit living in you," the "Holy Spirit living in you" or "Jesus Christ living in you" are all mean the exact same thing (see Romans 8:9, 10, 11).
 Born from Above: With a new heart you become, for the first time, a "clean vessel." You are a brand new person on the inside (2 Corinthians 5:17). God, in all His holiness, now has a place within you where He can live (1 Corinthians 3:16; 6:19). God's Spirit comes to live in your "born again" heart. Having God's life dwelling in you is what it means to be "saved." This is the new life (1 John 5:12; 2 Peter 1:4) that comes only through faith in Jesus Christ. You possess eternal life because Jesus, Himself, is Eternal Life (1 John 1:2; 1 John 5:11), and He now lives in you (Colossians 1:27; 2 Corinthians 13:5).
Your Life with Christ
 Union with Christ: With Jesus Christ living in you, His presence makes you literally righteous in your born again heart (Ephesians 4:24) because Jesus, the Righteous One, is inseparably joined to you in your new spirit (1 Corinthians 6:17). Righteousness has not merely been credited or imputed to you, it has been given to you as a gift, and the gift is the person of Jesus Christ (Romans 5:17). You can never, ever sin in your new spirit because Jesus in you can never sin (1 John 3:9). This is why you are secure forever in God's family (Colossians 1:13; 1 Peter 1:23).
 Living by Faith: Your redeemed inner spirit still "lives" inside the same mortal "house" that you had before you were saved. Your physical body has not yet been redeemed; it awaits a future redemption (Romans 8:23b). Unlike your new righteous spirit, your outer mortal body is still dead because of sin (Romans 8:10). You are spiritual perfection living inside mortal imperfection (2 Corinthians 5:2). This is why you can still sin in your mortal flesh.
More important, this is the precise reason why God wants you to live by faith. You can never make your mortal flesh righteous because it does not have the capacity to be righteous. However, as the Holy Spirit teaches you in your born again heart (Ephesians 1:17,18; Colossians 1:9; 1 Corinthians 2:10,13), you are being transformed by the renewing of your mortal mind (Romans 12:2). You become more righteousness conscious and less oriented toward your former life as an unbeliever (Hebrews 10:2 - in context this verse is referring to the imperfect sacrifices under the Law; but it implies what the perfect sacrifice - Jesus - would accomplish).
Most Christians are taught to live by their own human strength (having a good attitude, being obedient, etc.). This always leads to the endless try-fail-confess cycle. Worse, it creates a culture where minimal sinning is acceptable - "after all I'm only human; nobody is perfect." God's only standard is, and has always been, perfect righteousness.
So, how do you reconcile God's standard of perfect righteousness with the reality that your thoughts and actions are not always righteous? You do so by understanding that, in your born again heart, you are perfectly righteous. And, you understand that you cannot and should not depend on your mortal self to live your life.
The only way you can live a life pleasing to God is to live by the power of Jesus Christ within you - this is the life of faith. Jesus lives in your born again spirit, joined as one to you. As you follow Christ in faith, you will experience His righteous life being lived out in you while He does His good works through you (Galatians 2:20). To put it a different way, as your outer mortal body and mind are trusting and following Christ's life within your inner spirit, you are walking in faith. At the times that you live by your own human strength, you will stumble; simply return to following Christ in faith. Feelings of guilt and shame are NEVER from God (Romans 8:1); those feelings come from your own human conscience.
Note: the Holy Spirit does not convict believers of their sins; the Holy Spirit convicts the world of its unbelief (John 16:8, 9).
When Jesus was baptized at the beginning of His earthly ministry, the Holy Spirit came down to dwell in Him. In this way, the Father did His works and miracles through Jesus, as Jesus followed His Father in faith (John 14:10). Jesus did not do these works by His own human strength even though He was sinless (John 5:30; 5:19; 8:28). This same Holy Spirit that lived in and empowered Jesus now lives in you! This is why Jesus is both your Savior and your model for the life of faith.
Note: Your "heart," "spirit" and "nature" all mean the same thing. Your inner spirit is the real, eternal you while your mortal human body is your temporary "tent" (2 Corinthians 5:4; 4:16). This illustration might help you understand: as a believer, when you die, your body will go to the grave, because it has not yet been redeemed or made righteous; but, your spirit remains with the Lord forever, because you are already redeemed and joined to Christ (2 Corinthians 5:8).
Bible Verses Explaining the Gospel of Jesus Christ