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Here is a great Bible study on this topic that many don't really grasp. Its rather long, but worth reading. It's from, "Grace To You" a teaching by Dr. John MacArthur.
work out your salvation with fear and trembling; ( Philippians 2:12e)
The fifth motive for believers’ working out their sanctification is understanding the consequences of sin. Although God is loving, merciful, and forgiving, He nevertheless holds believers accountable for disobedience. Like John, Paul understood well that “if we say that we have no sin, we are deceiving ourselves and the truth is not in us. If we confess our sins, He is faithful and righteous to forgive us our sins and to cleanse us from all unrighteousness” (1 John 1:8–9). Knowing that he serves a holy and just God, the faithful believer will always live with fear and trembling. Fear translates phobos, which describes fright or terror (cf. Matt. 14:26; Luke 21:26; 1 Cor. 2:3) as well as reverential awe (cf. Acts 2:43; 9:31; 2 Cor. 5:11; 7:1). Trembling is from tromos, which refers to shaking and is the word from which the English word tremor derives. Both of those are proper reactions to the awareness of one’s own spiritual weakness and the power of temptation. The Lord seeks such an attitude in His children, as His words in Isaiah 66:2 indicate: “To this one I will look, to him who is humble and contrite of spirit, and who trembles at My word.”
An important Old Testament truth is “The fear of the Lord is the beginning of wisdom” (Ps. 111:10; cf. Prov. 1:7; 9:10). This is not a fear of being doomed to eternal torment, nor a hopeless dread of judgment that leads to despair. It is rather a reverential fear, a holy concern to give God the honor He deserves and avoid the chastening of His displeasure. Such fear protects against temptation and sin and gives motivation for obedient, righteous living.
Aware of his own personal weakness, Paul spoke of his “fear and … trembling” as he ministered to the church in Corinth (1 Cor. 2:3), and later of those believers who received Titus with the same kind of “fear and trembling” (2 Cor. 7:15). This kind of “fear and trembling” is closely related both to obedience to the Lord and to love and affection for Him and for fellow believers. It is for that reason that Solomon could declare: “How blessed [happy] is the man who fears always” (Prov. 28:14).
Such fear involves self-distrust, a sensitive conscience, and being on guard against temptation. It necessitates opposing pride, and being constantly aware of the deceitfulness of one’s heart, as well as of the subtlety and strength of one’s inner corruption. It is a dread that seeks to avoid anything that would offend and dishonor God.
Believers should have a serious dread of sin and yearning for what is right before God (cf. Rom. 7:14ff.). Aware of their weakness and the power of temptation, they should fear falling into sin and thereby grieving the Lord. Godly fear protects them from wrongfully influencing fellow believers, compromising their ministry and testimony to the unbelieving world, enduring the Lord’s chastening, and from sacrificing joy.
To have such godly fear and trembling involves more than merely acknowledging one’s sinfulness and spiritual weakness. It is the solemn, reverential fear that springs from deep adoration and love. It acknowledges that every sin is an offense against holy God and produces a sincere desire not to offend and grieve Him, but to obey, honor, please, and glorify Him in all things. Those who fear the Lord willingly accept the Lord’s chastening, knowing that God “disciplines us for our good, so that we may share His holiness” (Heb. 12:10). This fear and trembling will cause believers to pray earnestly for God’s help in avoiding sin, as the Lord taught them: “Do not lead us into temptation, but deliver [rescue] us from evil” (Matt. 6:13). That prayer again reflects the spiritual tension that exists between believers’ duty and God’s power.
Work out translates a present middle imperative of katergazomai and indicates a command that has a continuing emphasis. The idea is, “Keep on working out to completion, to ultimate fulfillment.” Heauton, here rendered your, actually has the more emphatic meaning of “your own.” The command is for believers to make a continuing, sustained effort to work out to ultimate completion their salvation, which has been graciously granted to them by God through their faith in Jesus Christ.
The principle of working out salvation has two aspects. The first pertains to personal conduct, to faithful, obedient daily living. Such obedience obviously involves active commitment and personal effort, for which Scripture is replete with injunctions, both negative and positive. Sin in every form is to be renounced and put off and replaced by righteous thinking. Believers are to cleanse themselves “from all defilement of flesh and spirit, perfecting holiness in the fear of God” (2 Cor. 7:1), setting their minds “on the things above, not on the things that are on earth,” because they have died to sin and their lives are now “hidden with Christ in God” (Col. 3:2–3). Just as they once “presented [their] members as slaves to impurity and to lawlessness, resulting in further lawlessness,” they should “now present [their] members as slaves to righteousness, resulting in sanctification” (Rom. 6:19), walking “in a manner worthy of the calling with which [they] have been called” (Eph. 4:1).
The apostle exhorted the Corinthians to strenuous effort in living the Christian life:
Do you not know that those who run in a race all run, but only one receives the prize? Run in such a way that you may win. Everyone who competes in the games exercises self-control in all things. They then do it to receive a perishable wreath, but we an imperishable. Therefore I run in such a way, as not without aim; I box in such a way, as not beating the air; but I discipline my body and make it my slave, so that, after I have preached to others, I myself will not be disqualified. (1 Cor. 9:24–27)
His words later in the present letter also demand aggressive Christian living:
Not that I have already obtained it or have already become perfect, but I press on so that I may lay hold of that for which also I was laid hold of by Christ Jesus. Brethren, I do not regard myself as having laid hold of it yet; but one thing I do: forgetting what lies behind and reaching forward to what lies ahead, I press on toward the goal for the prize of the upward call of God in Christ Jesus. Let us therefore, as many as are perfect, have this attitude; and if in anything you have a different attitude, God will reveal that also to you; however, let us keep living by that same standard to which we have attained. (Phil. 3:12–16)
work out your salvation with fear and trembling; ( Philippians 2:12e)
The fifth motive for believers’ working out their sanctification is understanding the consequences of sin. Although God is loving, merciful, and forgiving, He nevertheless holds believers accountable for disobedience. Like John, Paul understood well that “if we say that we have no sin, we are deceiving ourselves and the truth is not in us. If we confess our sins, He is faithful and righteous to forgive us our sins and to cleanse us from all unrighteousness” (1 John 1:8–9). Knowing that he serves a holy and just God, the faithful believer will always live with fear and trembling. Fear translates phobos, which describes fright or terror (cf. Matt. 14:26; Luke 21:26; 1 Cor. 2:3) as well as reverential awe (cf. Acts 2:43; 9:31; 2 Cor. 5:11; 7:1). Trembling is from tromos, which refers to shaking and is the word from which the English word tremor derives. Both of those are proper reactions to the awareness of one’s own spiritual weakness and the power of temptation. The Lord seeks such an attitude in His children, as His words in Isaiah 66:2 indicate: “To this one I will look, to him who is humble and contrite of spirit, and who trembles at My word.”
An important Old Testament truth is “The fear of the Lord is the beginning of wisdom” (Ps. 111:10; cf. Prov. 1:7; 9:10). This is not a fear of being doomed to eternal torment, nor a hopeless dread of judgment that leads to despair. It is rather a reverential fear, a holy concern to give God the honor He deserves and avoid the chastening of His displeasure. Such fear protects against temptation and sin and gives motivation for obedient, righteous living.
Aware of his own personal weakness, Paul spoke of his “fear and … trembling” as he ministered to the church in Corinth (1 Cor. 2:3), and later of those believers who received Titus with the same kind of “fear and trembling” (2 Cor. 7:15). This kind of “fear and trembling” is closely related both to obedience to the Lord and to love and affection for Him and for fellow believers. It is for that reason that Solomon could declare: “How blessed [happy] is the man who fears always” (Prov. 28:14).
Such fear involves self-distrust, a sensitive conscience, and being on guard against temptation. It necessitates opposing pride, and being constantly aware of the deceitfulness of one’s heart, as well as of the subtlety and strength of one’s inner corruption. It is a dread that seeks to avoid anything that would offend and dishonor God.
Believers should have a serious dread of sin and yearning for what is right before God (cf. Rom. 7:14ff.). Aware of their weakness and the power of temptation, they should fear falling into sin and thereby grieving the Lord. Godly fear protects them from wrongfully influencing fellow believers, compromising their ministry and testimony to the unbelieving world, enduring the Lord’s chastening, and from sacrificing joy.
To have such godly fear and trembling involves more than merely acknowledging one’s sinfulness and spiritual weakness. It is the solemn, reverential fear that springs from deep adoration and love. It acknowledges that every sin is an offense against holy God and produces a sincere desire not to offend and grieve Him, but to obey, honor, please, and glorify Him in all things. Those who fear the Lord willingly accept the Lord’s chastening, knowing that God “disciplines us for our good, so that we may share His holiness” (Heb. 12:10). This fear and trembling will cause believers to pray earnestly for God’s help in avoiding sin, as the Lord taught them: “Do not lead us into temptation, but deliver [rescue] us from evil” (Matt. 6:13). That prayer again reflects the spiritual tension that exists between believers’ duty and God’s power.
Work out translates a present middle imperative of katergazomai and indicates a command that has a continuing emphasis. The idea is, “Keep on working out to completion, to ultimate fulfillment.” Heauton, here rendered your, actually has the more emphatic meaning of “your own.” The command is for believers to make a continuing, sustained effort to work out to ultimate completion their salvation, which has been graciously granted to them by God through their faith in Jesus Christ.
The principle of working out salvation has two aspects. The first pertains to personal conduct, to faithful, obedient daily living. Such obedience obviously involves active commitment and personal effort, for which Scripture is replete with injunctions, both negative and positive. Sin in every form is to be renounced and put off and replaced by righteous thinking. Believers are to cleanse themselves “from all defilement of flesh and spirit, perfecting holiness in the fear of God” (2 Cor. 7:1), setting their minds “on the things above, not on the things that are on earth,” because they have died to sin and their lives are now “hidden with Christ in God” (Col. 3:2–3). Just as they once “presented [their] members as slaves to impurity and to lawlessness, resulting in further lawlessness,” they should “now present [their] members as slaves to righteousness, resulting in sanctification” (Rom. 6:19), walking “in a manner worthy of the calling with which [they] have been called” (Eph. 4:1).
The apostle exhorted the Corinthians to strenuous effort in living the Christian life:
Do you not know that those who run in a race all run, but only one receives the prize? Run in such a way that you may win. Everyone who competes in the games exercises self-control in all things. They then do it to receive a perishable wreath, but we an imperishable. Therefore I run in such a way, as not without aim; I box in such a way, as not beating the air; but I discipline my body and make it my slave, so that, after I have preached to others, I myself will not be disqualified. (1 Cor. 9:24–27)
His words later in the present letter also demand aggressive Christian living:
Not that I have already obtained it or have already become perfect, but I press on so that I may lay hold of that for which also I was laid hold of by Christ Jesus. Brethren, I do not regard myself as having laid hold of it yet; but one thing I do: forgetting what lies behind and reaching forward to what lies ahead, I press on toward the goal for the prize of the upward call of God in Christ Jesus. Let us therefore, as many as are perfect, have this attitude; and if in anything you have a different attitude, God will reveal that also to you; however, let us keep living by that same standard to which we have attained. (Phil. 3:12–16)