In their Q&A section, Come Reason Ministries (CRM) seeks to answer the question, What’s the difference between the soul and the spirit? It’s a good question and one that most probably have not given much thought to. CRM argues that we are souls who have spirits, just has we have bodies. The soul embodies ones entire makeup; the spirit allows one to connect with God, like the body allows one to connect with others. CRM argues that Hebrews 4:12 - "For the word of God [is] quick, and powerful, and sharper than any two-edged sword, piercing even to the dividing asunder of soul and spirit..." – warrants such a division. This seems to me to be an accurate understanding of the text (though I would prefer to see a stronger connection of the differences with Scripture).
So is this discussion even important?
Watchman Nee, a leader in the underground Christian church movement in China thought so. He wrote,
Is it a matter of any consequence to divide the spirit and soul? It is an issue of supreme importance for it affects tremendously the spiritual life of a believer. How can a believer understand spiritual life if he does not know what is the extent of the realm of the spirit? Without such understanding how can he grow spiritually? To fail to distinguish between spirit and soul is fatal to spiritual maturity. Christians often account what is [soulish] as spiritual, and thus they remain in a soulish state and seek not what is really spiritual. How can we escape loss if we confuse what God has divided? (The Spiritual Man, vol. 1, p. 22).
Thus, to understand the differences between soul and spirit is to help one mature as a Christian in relationship with God and others.