1 Peter 1:14-21 (ESV)
As obedient children, do not be conformed to the passions of your former ignorance,  but as he who called you is holy, you also be holy in all your conduct,  since it is written, "You shall be holy, for I am holy."  And if you call on him as Father who judges impartially according to each one's deeds, conduct yourselves with fear throughout the time of your exile,  knowing that you were ransomed from the futile ways inherited from your forefathers, not with perishable things such as silver or gold,  but with the precious blood of Christ, like that of a lamb without blemish or spot.  He was foreknown before the foundation of the world but was made manifest in the last times for your sake,  who through him are believers in God, who raised him from the dead and gave him glory, so that your faith and hope are in God.
This may be one of the more beautiful passages of all of scripture. It became the most beautiful sentence ever penned in German when Luther used it to expound upon the person and work of Jesus Christ in his explanation to the second article of the apostles creed. For that matter it may be the most beautiful sentence ever written in English. I had to write it many times during confirmation. The Lord be praised I had parents who saw fit to make me memorize gospel like that. Not with silver or gold but with the precious blood of Christ.
There is so much talk of second verses third use of law. But here you see law and gospel so clearly distinguished. Christians are being admonished to live a holy life also in all their conduct. I often think about that and what that means. The problem is that too often this is more or less watered down in our society. In fact holy conduct is often traded for politically correct conduct. It is interesting to trace the development of middle class mores, to see how some words once acceptable become unacceptable, and vice versa, the same with behavior. Sometimes these mores are in line with God’s law, sometimes not so much. Christians can’t afford to allow culture to lead them around by the nose like this. But it isn’t either just about following God’s law. It is about why and motives. Out of fear? That is the word mentioned here. Fear for what? Perhaps here the word is better translated awe, or respect. Perhaps we need to fear God, he can smite you, he is the one that has the power to throw you into hell. But we have the love of his son the forgiveness he has given us. This is what Peter goes on to emphasize. And with that we have awe, and respect, love for him who so dearly loved us, and in that love we love our neighbor. We have not been given a spirit of fear: “for God gave us a spirit not of fear but of power and love and self-control. “ (2 Tim. 1:7 (ESV)
Fear, the spirit of fear does not lead one to holy conduct. Like the law itself and through the fear of death it brings, we are driven not to love, but to narcissism. I often observe this in “religious” people, most especially in those who often say “I’m not religious, I’m Christian.” Whatever. When your faith is so engrossed in right and wrong that you find it your duty to chastise everyone around you, and scold children that don’t belong to you in a scalding fashion, you are not conducting yourself in a holy manner. Sure there is a time to be firm with a child and get them to stop running in church or whatever, but it isn’t the end of the world. When you can’t wink or nod at another person’s sin and let it go, when you can’t admit your own sin, you have problems. This comes from fear of the law. That is a spirit of fear. Being holy in your conduct is about loving your neighbor, respecting your neighbor for whom Christ died. Loving them even when they are sinful. That is the Holy conduct that Jesus showed us, when he ransomed us from our former ignorance and futile ways we inherited from our forefathers. That is the way of the world that only thinks about itself. Who find following the law when it is advantageous, because “everything is legal in Jersey if you don’t get caught.” (Do you know that reference?) The futile ways are the ways of fear, fear that sucks you into a gluttonous libertine life of debauchery and despair, or an Epicurean asceticism that fails to live at all.
From this we were ransomed with the precious blood of Christ. We have no fear, but the love of Christ through whom we have faith in God works in us a respect and awe of God that reflects itself also in love and respect for our neighbor, that we do not willingly sin against them. Thus we live our sanctification, our holiness, for you are holy, just as the one who called you is holy.