The Bible frequently says, “The just shall live by faith,” so what does that mean exactly?
What is Faith?
It sounds like a simple enough question. What is faith? A child has faith that their parent will take care of them and cross the street safely. The child trusts that the parent is holding onto their hand, and not the child trying to hold on by himself. A child-like faith is highly valued in Scripture, and particularly by Jesus. Our Lord said, “Truly, I say to you, unless you turn and become like children, you will never enter the kingdom of heaven” (Matt 18:3). What does Jesus mean by saying we must be “like children?” He answers that question in His very next sentence, saying, “Whoever humbles himself like this child is the greatest in the kingdom of heaven” (Matt 18:4). Children are humble, teachable, and trusting. A very young child would believe dad if he said the moon was made of cheese, so the faith that a little child has is the faith by which we can be saved.
We can humbly come before the Lord and confess our sins and put our trust in Him. It is having faith in God that He will save us through Jesus Christ. We can trust that. It is written in Scripture that if we believe in our hearts in the Lord Jesus Christ and confess Him before others, we will be saved. That takes faith, but even that faith is a gift of God, and not something we earn, or somehow come up by ourselves (Eph 2:8-9). We were dead in our sins until we were quickened by the Spirit of God (Eph 2:1), so even though faith is a gift of God, it’s also a choice; we must choose to believe in Christ and believe in what God’s Word says about how we can be saved (Rom 10:9-13). It is a positive assurance or believe of things we cannot even see but know is true (Heb 11:1). 
Faith Before the Cross
One of the biggest questions new believers have is, “How could Abraham have been saved before Jesus died on the cross?” For others, they mention Noah or Moses, or David, so how were the saints in the Old Testament saved before Jesus died on the cross? The same way we are saved and that is to believe God or put our trust in Him. For example, we believe that Jesus was born of a virgin, that He lived a sinless life, and died for our sins and rose again on the third day. We believe those essential truths and God accounts that to us as righteousness because we have believed in Jesus. Abraham believed in God too, even before Jesus came to be born in the flesh. When God made a covenant with Abraham it says Abraham “believed the Lord, and he counted it to him as righteousness” (Gen 15:6). Abraham trusted or believed what God said and trusted that God would bring about what He promised, and never has one promise of God failed; nor will any ever fail! God is faithful. Abraham had seen this for himself, and he believed God, so God “counted it to him as righteousness.” That’s why Abraham (and the other Old Testament saints) will be in the kingdom. They had faith in God. They believed God and obeyed the Lord, proving their faith was genuine, and thus, God saved them.
Living by Faith
The fact that the just shall live by faith can mean the just live out their faith in their daily lives. They live according to their faith in God and it’s demonstrated in their obedience and they know they’ve been justified by the blood of the Lamb because they believed the Scriptures. This doesn’t mean we’ll be sinless because that’s not possible, but it should be our sinning less over time. Those who have been justified will be striving to obey the law, but realizing they can’t be saved by the law. That’s because “it is evident that no one is justified before God by the law, for “The righteous shall live by faith” (Gal 3:11). We live by faith while living lives of obedience and our obedience is motived out of love (John 14:15).
We’ve read how the just live by faith in God and that it means they believe God, just as Abraham believed God and God accounted that as righteousness to him, and this faith is demonstrated in our daily lives. It’s how we live, and just like us, the Old Testament saints believed God. They trusted in God just like we’ve trusted in Jesus Christ came as the God-Man. They had faith that God’s promises would be fulfilled just as we do, so who are the just who live by faith? The just are those who have been justified. Some say it this way; “It’s just as if I never sinned,” although that’s not entirely accurate because we have sinned. The word justified means we are “pronounced or treated as righteous” before God, but that’s only because of Jesus Christ (2 Cor 5:21). The Prophet Habakkuk wrote, “The righteous shall live by his faith” (Hab 2:4), so the just are the same as the righteous. This verse from Habakkuk (Hab 2:4) is repeated three times in the New Testament, so it must be important, and it is because the way to be saved has not changed. It is by trusting in or believing in God.
Today there seems to be many “paths” to God or what they consider God, but the only way to the Father still must come through Jesus Christ (John 6:44). There is positively no other way to be saved (Acts 4:12). There is no plan B, and as has been said, “It’s not about a plan of salvation; it’s about the Man of salvation,” and that is Jesus Christ. Just like Abraham, we can believe God, and God will account that to us as righteousness. That’s what “The just shall live by faith” means.
Here is some related reading for you: What Does the Bible Say About Faith? A Christian Study 
Resource – Scripture quotations are from The Holy Bible, English Standard Version® (ESV®), Crossway Bibles. (2007). ESV: Study Bible: English standard version. Wheaton, Ill: Crossway Bibles. Used by permission. All rights reserved.