Grace is unmerited, undeserved favor. It is God’s kindness and graciousness toward humanity without regard to the worth or merit of those who receive it and without their deserving it.
This is the accepted definition of grace and most Christians will agree with it without giving it much thought. The problem is that they don't really think of the implications of grace. J.I. Packer gives us some insight when he expands on this definition.
“The grace of God is love freely shown toward guilty sinners, contrary to their merit and indeed in defiance of their demerit. It is God showing goodness to persons who deserve only severity and had no reason to expect anything but severity” (J.I.Packer, Knowing God).
Think about it. Grace is love freely shown to guilty sinners. If you don't believe you are a sinner you won't experience the grace of God. Jesus came to seek and save those who are lost. If you don't believe your a sinner and that your lost and need to be found than you will be content in your lostness.
Grace is God showing goodness to people who only deserve severity. No human being has any reason to expect anything but severity from God. No person can claim they are good enough or that they have done enough to earn or merit God's grace. If you could earn or merit grace than it wouldn't be grace.
Grace comes in spite of your merit. God doesn't give grace because someone has done a really good job or lived a really good life or has done many many good deeds. That would make grace a reward and would mean that because of the life you lived you put God in your debt, he now owes you something and he doesn't owe you anything but severity.
Grace comes to guilty sinners in defiance of their demerit. God doesn't give you what you deserve which is judgment and severity he gives you grace. He gives you kindness and graciousness and forgiveness and love. This is what grace is.