Sanctification: The (usually gradual or uncompleted) process by which a Christian believer is made holy through the action of the Holy Spirit.
The process of sanctification is a difficult but necessary one. I've used this analogy (or simile, I don't know, don't judge) before but it seems appropriate to me: conviction (which leads to sanctification) is like muscle soreness, it's painful and uncomfortable but you know it's making you stronger in the long run. That said, too much muscle soreness leads to muscle injury which actually makes you weaker in the long run, conviction coupled with guilt is like muscle injury. Okay this analogy is terrible but just go with me. Conviction, like muscle soreness, is good, guilt, like muscle injury, is bad. Conviction leads to sanctification which ultimately brings us closer to God. Guilt, or being ashamed, leads to self-evaluation (good) and resistance to God's grace (bad), which ultimately pulls us further from God. One more analogy here, bear with me:
It's like building a brick wall. On one side of the brick wall is you with all your failures and sins. On the other side of the wall is sanctification leading to closeness with God. Now imagine that every time you start to cross over the wall toward God you're being sanctified and getting closer to him, but every time you sin you're slipping back toward the side of the wall where your failure and sins live. Now imagine that if every time you sin you also feel ashamed, that shame is like putting down one more brick along that wall. The more you struggle with feeling ashamed because of your failure and sin, the harder it becomes to cross over the wall and the larger the barrier between you and God. Eventually if you get too wrapped up in the shame, you will build a brick wall that is very difficult to overcome and may give up and completely succumb to your sin.
Ashamed: unwilling or restrained because of fear of shame, ridicule, or disapproval.
Being ashamed pulls us from God by forcing us to resist His grace. If we accept His grace then we know He loves us unconditionally therefore will not "ridicule" or "disapprove" of us. Although God will disapprove of our actions because of our sin nature, He loves us just as much as He would if we never did anything wrong. He does not hold things against us, in fact the bible says that He "cancels the record of debt that stood against us". I'll just write down these verses.
Colossians 2:11-14 - "In Him also you were circumcised with a circumcision made without hands, by putting off the body of the flesh, by the circumcision of Christ, having been buried with him in baptism, in which you were also raised with him through faith in the powerful working of God, who raised him from the dead. And you who were dead in your trespasses and the uncircumcision of your flesh, God made alive together with him, having forgiven us all our trespasses, by canceling the record of debt that stood against us with its legal demands. This he set aside, nailing it to the cross."
This idea of God's forgiveness is not to say that we should all be happy and satisfied in the midst of our own sin. In fact, it is to say just the opposite. Knowing God loves us no matter what we do, should make us want to do His will that much more. I'm gonna give another analogy here, bear with me. Imagine you have two bosses, one is very stern and hard on you. He does not tolerate wrongdoing or poor quality work. He punishes you if you fail because he expects the best from you. You have great respect for this boss because he "sticks to his guns", however you are somewhat scared of him. Now imagine your other boss is very forgiving. He gives you second and third and fourth chances to get it right. His philosophy is that punishment will lower the morale of his employees so he doesn't correct you if you're wrong. He's the boss you go running to if you have a problem that you're too afraid to tell the other boss about. You love working for this boss because he is caring and forgiving, but you don't really respect him and you certainly don't fear him. Part of you would want to work for the boss who is just nice and forgiving all the time, however, the other part of you knows that the stern boss will make you a better employee.
Merge those two bosses and you have God. He is loving and caring and forgiving. He is all of these things more than anyone who has ever lived. He is also stern, unwavering and expects the best from you. He made you in His image, this means He knows your capability to become a great employee (follower of Christ). Now, with God we know we should respect him and try our best to be as much like him as we can, but at the same time if we have a problem we can run to Him knowing He has already forgiven us. Hopefully that analogy was half-way comprehendible, but Paul was much better at explaining things than me, so I'll let him explain what I mean here.
Romans 5:18-6:4 "Therefore, as one trespass led to condemnation for all men, so one act of righteousness leads to justification and life for all men. For as by one man's disobedience the many were made sinners, so by the one man's obedience the many will be made righteous. Now the law came in to increase the tresspass, but where sin increased, grace abounded all the more, so that, as sin reigned in death, grace also might reign through righteousness leading to eternal life through Jesus Christ our Lord.
What shall we say then? Are we to continue in sin that grace may abound? By no means! How can we who died to sin still live in it? Do you not know that all of us who have been baptized into Christ Jesus were baptized into his death? We were buried therefore with him by baptism into death, in order that, just as Christ was raised from the dead by the glory of the Father, we too might walk in newness of life."
Sanctification is a balance of recognizing God's grace when we feel conviction and in light of that realizing that we are made in His image and he expects the best from us. God's grace and forgiveness are not grounds for making excuses or avoiding conviction they are qualities of a loving and caring God who requires the most of us and expects us to give him our best.