Grace, which is kindness from God that we don't deserve, is something that everyone needs because we all sin, fall short of God's glory and require forgiveness. When you teach your teens about grace, you give them a dependable foundation for their faith, helping them understand both that they can count on God to forgive them when they sin and seek His mercy, and that they can live more fulfilling lives by being gracious to others.
Demonstrate grace in your dealings with your children. Jesus taught us to address God as a parent -- "Father" -- when we pray. The concept of God's grace is easier for teens to grasp if they see their parents model grace. The clearest illustration of grace your teens will have is to see you living your life graciously and being quick to forgive others.
Read Scriptures about grace with your teens. Start with Ephesians 2:8 (English Standard Version), which states, "For by grace you have been saved through faith. And this is not your own doing; it is the gift of God." For additional verses to read with your teens, look up the word "grace" in a Bible concordance. Many Bibles include a concordance, which is a listing of Bible verses using keywords, usually in the back. You can also access Bible concordances online at biblegateway.com and biblestudytools.com.
Illustrate grace -- a completely undeserved favor -- in practical terms by discussing it in terms of an impossible task. Teens often have the idea that God will judge us based on how good or bad our behavior is. Ask your teens who would win in a jumping contest between a baby, themselves and Kobe Bryant. Unless you have an extremely athletic teen, they will choose Bryant. Then ask them who would win if the contest was to jump to the moon. Obviously, no one would win. The teen would do better than the baby and not as well as Kobe, but no one would make it. They would need help getting to the moon. Explain that God is perfect and that grace is His way of helping us have a relationship with Him despite the fact that we are imperfect.
Encourage your teens to receive God's grace as a gift. Discuss that Ephesians 2:8-9 (New International Version) teaches us that "-- it is by grace you have been saved, through faith -- and this is not from yourselves, it is the gift of God -- not by works, so that no one can boast." Teach your teens that the gift of God's grace is truly a gift -- something given without expectation of receiving anything in return.
Encourage your teens to extend grace to others. Read the parable of the unmerciful servant found in Matthew 18:21-35 with them. Teach them the Lord's Prayer found in Matthew 6:9-12, focusing on the passage which says, "Forgive us our debts as we also have forgiven our debtors." Encourage your teens to have grace with, and forgive, others exactly as they would like grace shown to them.