The spirit of man is the part of man that is born again. It is the part of man that receives eternal life, which is the nature and life of God. It is the spirit of man that becomes a new creature in Christ Jesus. The soul is not the innermost being at all. It is not the soul that is born again. The saving of the soul is a process.
James 1:21 used to bother me when i was a denominational preacher before i was filled with the Holy Spirit. I didn’t know what i know now. I used spirit and soul interchangeably referring to the spirit as the soul and the soul as the spirit. I didn’t separate them as the Bible does but i did have enough sense to leave this verse alone until i grew so that i could understand what it is saying.
The Epistle of James was not written to sinners. James did not write to the world, he wrote this letter to the church. We know that because of James chapter 5 where he says, ” Is any sick among you ? let him call for the elders of the church … ” (v. 14). In other words, if there is any sick among the church, let him call for the elders of the church. Also referring back to the first chapter of James, let’s pick up with verse 18;

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“Of his own will begat he us with the word of truth, that we should be a kind of first-fruits of his creatures. Wherefore, my beloved brethren, let every man be swift to hear, slow to speak, slow to wrath : For the wrath of man worketh not righteousness of God. Wherefore, lay apart all filthiness and superfluity of naughtiness and receive with meekness the engrafted word which is able to save your souls.”

James is talking to born-again believers. Of the father’s own will, he writes, we were begotten, or born again by the word of truth, he calls them ” my beloved brethren “, so they were in Christ. Yet he encourages these born again, spirit filled people to receive the engrafted word with meekness, ” … which is able to save your souls “, evidently their souls were not saved.
You see, a man’s spirit, the innermost man, the real man receives eternal life and born again but his intellect and emotions which comprise his soul still have to be dealt with, they are not born again, they are to be renewed.
Paul speaks about the renewing of the mind, writing to the saints at rome, ” And be not conformed to this world, but be ye transformed by the RENEWING OF YOUR MIND, that ye may prove what is that good and acceptable and perfect will of God ” ( Roman 12:2 ). The Psalmist David spoke of the restoring of the soul, “He restoreth my soul…” ( Psalm 23:3 ). The Hebrew word translated restore in the old testament mean about the same thing, the soul ( the mind ) is to renewed, in the word it is never written that God restores our spirit, our spirits become brand new creatures in Christ Jesus, our souls, however must be renewed or restored.

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