Conrad, when the Bible says "live by faith" (Rom 1:17, 2 Cor 5:5) what in the world does it mean?  Funny you should ask. First let me tell you what faith is not.  It's not just belief.  What if I went around saying, "I have faith that God will turn me into a turkey sandwich with mustard and extra pickles."?  No matter how much I believe it, or awesome that might be, it's not gonna happen. 

Faith isn't whatever you want to believe.  Faith is believing in God's Word.  But it's not just that.  Just because I believe that God told me to "love my neighbor" doesn't mean that I do it.  (Just look at the poop in our backyard from our neighbor's Rottweiler and the Great Dane and you'll know why.)

Yeah, it doesn't count as faith unless you actually obey it.

So, back to the original question, "what does it mean to live by faith?"  It boils down to: knowing some verse, believing it and obeying it". 

So here's a passage that you can plop down in most situations so you'll know how to act.

  GAL 5:22 But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, [23] gentleness and self-control.

You can live by faith by acting in one of these nine ways. 

When you're driving and someone is driving slow in the passing lane - you can use patience by not rolling down your window and calling them a "clueless poophead ninny muggins", but rather waiting like two seconds and passing them in the not-passing lane.

When some kid at school smells like farts - you can use goodness by not thinking poorly of him.

When you're at work and you want to stop in on facebook so you can update your status to something amazingly crucial to your friends lives like, "Conrad is thinking about eggs."  - you can use faithfulness by doing your job.

When you step in neighbor dogs' poop in your own backyard - you can use self-control by not committing murder. 

With that one verse you can live by faith in all situations.  Know God's Word, Believe God's Word and Do God's Word.  That is living by faith.