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How does grace save me?

But because of his great love for us, God, who is rich in mercy, made us alive with Christ even when we were dead in transgressions—it is by grace you have been saved. And God raised us up with Christ and seated us with him in the heavenly realms in Christ Jesus, in order that in the coming ages he might show the incomparable riches of his grace, expressed in his kindness to us in Christ Jesus. Ephesians 2:4-7
            Grace is an act of kindness done undeservingly and without obligation.  God did not have to save us but could punish us eternally for our sins.  Yet, He went through the process to substitute Himself for us and taking on the punishment for those sins by dying on the cross.  We were dead because of our sins and yet Jesus rescued us from that death.  He didn’t need to do it but He wanted to do it.  That’s grace.