Don't you just love the word "grace?" I love the whole concept and idea of it. As wonderful as it is, I think it is one of the most misunderstood words in all of theology. I found this quote that explains it more fully:
“One of the most fallacious doctrines originated by Satan and propounded by man is that man is saved alone by the grace of God; that belief in Jesus Christ alone is all that is needed for salvation. . . . One passage in the Book of Mormon, written perhaps . . . to stress and induce appreciation for the gracious gift of salvation offered on condition of obedience . . . is particularly enlightening: ‘For we labor diligently to write, to persuade our children, and also our brethren, to believe in Christ, and to be reconciled to God; for we know that it is by grace that we are saved, after all we can do.’ (2 Nephi 25:23; italics added.) . . .
“. . . However good a person’s works, he could not be saved had Jesus not died for his and everyone else’s sins. And however powerful the saving grace of Christ, it brings exaltation to no man who does not comply with the works of the gospel." Spencer W. Kimball, Teachings of Spencer W. Kimball, pp. 70-71