Grace - God's undeserved love; God loves people even though they don't deserve God's love and are not worthy to receive God's love.

Saved - God's act of rescuing people from a negative state and changing that negative state into a positive one. For example, God rescues us from sin and evil, and then gives us forgiveness and a new life.

Faith - The primary meaning is trust in and commitment to Jesus Christ.

The second part: "and that not of yourselves; it is the gift of God." The last half of this clause reaffirms what has already been stated in the first part of the passage, namely, that it is God who saves people, and God saves them because of God's love for them which they don't deserve. If this is so, then salvation is the gift of God, pure and simple. You do not pay for a gift, and if salvation is a gift, then you do not pay for it; you do not earn it in the same way that you earn a salary. This idea is emphasized in the expression "not of yourselves." You do not deserve it, neither do you work for it.

The third part: "not of works, lest anyone should boast." This again expresses in a different way the same idea that salvation is a gift from God and not a result of human endeavor and effort. "Not of works" can be restated as "you do not work for your salvation," or "you do not do anything in order to be saved." If you work for your salvation, then it is no longer a gift. If you pay for your salvation, even if it is only one centavo, then it is no longer a gift. But the fact is, salvation is God's gift to those who trust in Christ. Now if this is so, why then should we boast about our salvation? Why then should we be proud because we are saved? Instead of boasting, we should be grateful, as we acknowledge God''s tremendous gift to us.

Now then, what is the place of works or actions in the drama of salvation? I would suggest that you do not stop at verse 9, but you go on to verse 10.

10 For we are his workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them.

I would suggest to you that you would be able to understand this passage much better if you read it in one of the translations that is easier to understand, for example, the Good News Bible which I quote here:

8-9For it is by God's grace that you have been saved through faith. It is not the result of your own efforts, but God's gift, so that no one can boast about it. 10God has made us what we are, and in our union with Christ Jesus he has created us for a life of good deeds, which he has already prepared for us to do.

The Contemporary English Version (CEV) is also good:

You were saved by faith in God, who treats us much better than we deserve. This is God's gift to you, and not anything you have done on your own. 9It isn''t something you have earned, so there is nothing you can brag about.

The Magandang Balita Biblia is equally good:

Dahil sa kangandahang-loob ng Diyos ay naligtas kayo sa pamamagitan ng inyong pananalig kay Cristo. At ang kaligtasang ito'y kaloob ng Diyos, hindi mula sa inyo. Hindi ito dahil sa inyong mga gawa kaya't walang dapat ipagmalaki ang sinuman. Tayo'y kanyang nilalang, nilikha sa pamamagitan ni Cristo Jesus upang iukol natin ang ating buhay sa paggawa ng mabuti, na itinalaga na ng Diyos para sa atin noon pa mang una.