Man, this is a great topic!
When I became a Christian, I began listening to Joseph Prince, and I realized he was telling the truth. My church was a bit legalistic, though, and hadn't accepted grace yet. Then God sent a pastor to teach us about grace and there was many miracles in our church and our pastor changed directions and learned about grace from Andrew Wommack's teachings on Romans.
After I had been under grace a while, I realized I still wasn't living right (I'm still not there yet). And I began to question... "What about morality?" I was using grace as an excuse to ignore parts of scripture, "Oh, that's the law! I better ignore that!"
Then God led me into a new level of revelation. I tiptoed back into legalism, but in doing so, I learned why legalism is bad, but then also I learned how not to be scared of God's law or morality from the Bible.
The laws in the Bible are great. Let's say you or I have to start a government tomorrow. Well, the best place to look for those laws would be the Bible. We could even make those laws better than what the Jews had, by putting forgiveness and love as a concept in them.
"Do not murder" is a great law. It keeps society sane. But spiritually, if we examine the hearts of men since we've been born, most have had murder in their heart at least once... making them guilty of God's law.
But God's law vs. man's law are two different things. And in relationship with God, we can't establish our own holiness. We have to be given it by faith.
As for working toward a holy lifestyle, I have found it comes down to grace. You live more holy by God's grace, through knowledge of his word, believed in faith.
As soon as you try to be more holy by, "I'm going to do better!" ... what are you really doing? You're making an oath.
But I tell you, do not swear an oath at all: either by heaven, for it is God's throne; - Matthew 5:34
God doesn't want you to have to live under that and be constantly tempted by the law to break it. He simply wants a "Yes" said in faith where we leave it all on his shoulders.
And so holiness and sanctification comes from God, through faith and revelation of his word. If you see that you're failing, "Doing better" wont achieve much usually unless you have developed a great degree of self discipline.
But my flesh doesn't have discipline. What discipline I have learned is from God's spirit not my flesh. I have things I believe in the spirit that I believe, and all sin is caused by a bad belief in my mind will and emotions. Change the belief, change the confession, and it will change the resulting action.
Faith is the victory that overcomes the world!!! - 1 John 5:4
So people who say you need to live holy are right. The apostles said it in scripture even. But most people in the modern church who say we need to live holy are lying to you by their intent. They are trying to sneak legalism back into your thinking, and bring you back into bondage to sin.
When I get into legalism, I sin 5 times as much, and it eventually just ends in a bunch of sinning, if I don't repent of legalism and focus on faith. (Romans 7:5)
And you see, when you get into grace, you end up wanting to live holy quite apart from fear. This is what I was doing after I had gotten into grace and started to wonder about morality. I wasn't afraid, I was just wondering, did God have something better for me? And then I learned I already had the better things of God, and those better things are manifest supernaturally by faith, not carnally through efforts. This is part of repentance from dead works (Hebrews 6:1) where by our righteousness is as filthy rags (Isaiah 64:6).
And I found as I was a new Christian, I believe having been exposed to some legalism, I became impatient about sanctification and holiness. I wanted to get my act all straightened out immediately and I did not want to wait for God to teach me what to believe in faith. But as much as I didn't focus on the faith aspect, and I focused on what I was going to do, I just went backwards. This going backwards is legalistic backsliding. If you return to the law, you fall from grace (Galatians 5:4).
I believe backslider born-again Christians who live in sin, are just operating under the law and that's why they live in sin. They're clearly free of sin and the law, but if they don't know that they're free of both of those things, they will certainly live under the law which makes them subject to sin (Romans 6:14).
But you see when that Christian comes back to church and believes in faith again, yes that will improve their life and get them out of sin... but it's not because they're making an effort of the flesh, but it's because they're receiving God's word again which sets them free. And while the legalistic thinker may want to focus on how they're living holy now, really, it's what God's word does. God produces holiness not us.
So I like God's law, but when the devil tries to bring it for me to follow, I rebuke him with a passion. I will not live under the law, I will live under grace, and I will do greater works than the law by love. If you aim for the law, you're setting your sights too low as a Christian. We were never meant to operate as though we were stiff-necked rebellious Israelites without faith, in the desert to whom the law was given. They all died in the desert too. That's the fruit of the law.
This is what recently really impacted me. A minister (a grace teacher even) I respect quoted me this verse: Leviticus 18:5 and said the law was good because people could "live by God's statues and judgement" so that the law was good in that it gave life. But I disagree with his interpretation entirely.
The life the law gives is not found in the law itself. The life of God's law is found in the death it produces. It so certainly condemns us to death and brings that death upon us so radically, that we cry out for a savior. And that savior is the life that the law produces. And God confirmed this to me when I read Romans 10:5
Moses writes this about the righteousness that is by the law: "The person who does these things will live by them." But the righteousness that is by faith says: "Do not say in your heart, 'Who will ascend into heaven?'" (that is, to bring Christ down) "or 'Who will descend into the deep?'" (that is, to bring Christ up from the dead). But what does it say? "The word is near you; it is in your mouth and in your heart," that is, the message concerning faith that we proclaim: If you declare with your mouth, "Jesus is Lord," and believe in your heart that God raised him from the dead, you will be saved.
And so any teacher who says you will live by God's law according to the OT, must be made aware that the law produces death and death only in man. Then when we realize this, we find eternal life itself in Christ, through the new birth. The law is good that it kills us. When we are crucified with Christ at the act of salvation, our old nature is crucified by God's law. God's law then is good because it kills what deserves death. And in that death we are raised from it to new life by faith.