Grace does not give us a license to knowingly sin...

Grace does not give us a license to knowingly sin. Grace is simply what is provided to us because God knows we will sin.
Grace is what gives us a 2nd chance, like it did Adam and Eve when they blew it, like when Noah was spared, like when we were provided with the greatest sacrifice of all. This sacrifice was for our sins, because we could not keep the law, God by grace made a way through the provision of his son as a sacrifice for our sins. Grace is a gift, not to be abused. God gives us opportunity after opportunity to choose him, that is Grace, but if we continue to choose our own way like Judas, God may let us have our own way.
King David committed terrible sins, by choice he allowed himself to be in a position to be tempted while all other men were away fighting. By God's grace he was spared, but he paid a terrible price. Sin always comes with a price. Grace simply offers a 2nd chance, it does not wash away the consequence of sin.
Many feel that grace came into play in the new Testament, however it is all over the Old testament. Some believe that God did not punish sin in the New testament and that Grace was always offered, however the story of Ananias and Sapphira disproves that theory. It suggests that there can be a steep price for sin.

Read Acts 5:1-11
Acts 5:1-11 NIV

Ananias and Sapphira: A Lesson in Grace

In my life I know without doubt that I pay a price for disobeying God, for not listening to that still small voice. One poor choice after another leads me further from God and all of a sudden I may find myself in a position where God allows something into my life to jolt me back to him. That is my experience.

Book Review: The Grace of God by Andy Stanley