Those who seek to earn righteousness through keeping the Law are consumed with "doing," while those who receive righteousness by faith are simply confessing what has already been done. This is a simple and profound difference. If we are still "doing" acts of holiness to get God to move in our lives, then we are still operating under a "Law" mentality that is not faith (Galalatians 3:12). When we simply believe and confess what has already been provided through Christ, that's grace.
A person who is living under the Law and a person who lives under grace should have very similar actions of holiness, but their motivations are completely opposite. The legalist has their attention on what they must do, while the person living by faith has his attention on what Christ has already done for him.
The Scriptures teach us to confess with our mouths and believe with our hearts, and we will receive from God. The legalist thinks, That means I can get God to heal me by confessing, 'By his stripes I am healed.' The person who understands God's grace will not confess the Word to get healed. They will confess, "By His stripes I am healed" because they really believe it has already been done.
Analyzing our "mind set" is the simplest way of discerning whether we are operating in true Bible faith or a legalistic counterfeit. If the motive for our actions is to be accepted with God, that's legalism. If we live wholly out of faith and gratefulness for what God has already done, that's grace. Grow in grace!