Chapter 3 of First Corinthians is one of the best Chapters to illustrate how two things that are seemingly inconsistent can both be true at the same time.
Paul is gently chastising the Corinthians basically calling them “spiritual babies”. He makes the point to them that if they were deepening their faith they wouldn’t be arguing amongst themselves. Then notice what Paul says …
6 I planted, Apollos watered, but God gave the growth. 7 So neither he who plants nor he who waters is anything, but only God who gives the growth. 8 He who plants and he who waters are equal, and each shall receive his wages according to his labor. 9 For we are God’s fellow workers; you are God’s field, God’s building.
So Paul planted and Apollos watered but the seed only grows because of God. So one could say, it is God alone who saves.
At the same time Paul says, “each shall receive his wages according to his labor” and “we are God’s fellow workers”. This is an important key to understanding God’s plan for salvation. Absolutely, only God saves but he CHOOSES to accomplish the salvation of souls through the instrument of others and the works they do for him. Thus Paul can truly say we are God’s fellow workers. Remember the example of a mother baking a cake who lets her small child help. Letting the child help doesn’t any way diminish the work or the mother, who did not need the child to help. On the other hand, the child genuinely adds something to the work being done and in fact learns to become more like the mother in the process. This is the way of works in salvation and we truly are God’s fellow co-workers.
The second half of the chapter is the verse most commonly used to establish purgatory.
10* According to the grace of God given to me, like a skilled master builder I laid a foundation, and another man is building upon it. Let each man take care how he builds upon it. 11* For no other foundation can any one lay than that which is laid, which is Jesus Christ. 12 Now if any one builds on the foundation with gold, silver, precious stones, wood, hay, straw– 13* each man’s work will become manifest; for the Day will disclose it, because it will be revealed with fire, and the fire will test what sort of work each one has done. 14 If the work which any man has built on the foundation survives, he will receive a reward. 15* If any man’s work is burned up, he will suffer loss, though he himself will be saved, but only as through fire.
So, this work we do for the Lord will be tested by fire on “the Day”, which is the day of Judgement. For the work that survives the fire, the good works, you will receive a reward. For the works that are burned up, the person will “suffer loss” but will still be saved. So on the day of our judgement there is some state, or place, or process in which the work of our life will be tested. In is not heaven because a person still “suffers loss”. It is not hell because despite suffering the person will still “be saved”. Thus is a 3rd state where those things that are unpure are burned or purged away.
They key thing to understand about what Paul is saying that he is not saying that these works earn one’s entrance into heaven. What he’s saying is that as a fellow worker with God we must be careful in the work we do on his behalf, but God’s mercy is great and if we fail in some respect, the failings will be purged away by fire, leaving behind only what is good and pure.