How refreshingly honest of your daughter to say what she thinks rather than simply give the answer that is expected. But how prove to her that sanctifying grace is real? By example, by demonstrating to her that the practical effects of sanctifying grace result in a transformed life to; to illustrate how God’s sanctifying grace sets believers apart for holiness.
This is my understanding of the Catholic view of sanctifying grace:
Sanctifying grace refers to a specific supernatural infusion of God’s grace that makes a person holy and pleasing to God. Deifying grace and perfecting grace are other terms for sanctifying grace, which is believed to be imparted through the Catholic sacrament of baptism. The Roman Church teaches that at baptism, the time when sanctifying grace is received, a person becomes part of the body of Christ and able to receive additional graces for living a holy life.
According to the Catechism of the Catholic Church, sanctifying grace is also called the “grace of justification” because it is the grace that makes a soul acceptable or justified before God. This grace transforms a sinner into a holy child of God. Source: What is sanctifying grace?
I realise this comes from a Protestant source, so if this is inaccurate or misleading, please say so.
Another approach might be to simply explain to your daughter that if she wishes to experience the free and undeserved gift of God’s sanctifying grace, first she has to acknowledge it is real, second that she needs it more than oxygen, and third that she first has to empty her hands in order to receive it.
For it is by grace you have been saved, through faith—and this is not from yourselves, it is the gift of God (Ephesians 2:8).
For what it’s worth, when I first came to saving faith in Christ Jesus and presented myself for adult baptism with my husband and our son present, our son asked me, “Mum, does this mean you have to become holy?” Our son was only 12 years old. He intuitively realised that my public declaration of my Christian faith necessitated a big change in my life! Out of the mouths of babes and children...
Perhaps this is the only evidence that matters to children – that they can see how Christians live a life that is different to others, that God’s sanctifying grace has transformed their lives. It’s a case of walking the walk, rather than talking the talk. Children are not easily fooled! Role models might be the answer here - real-life, in your face, modern and even public figures who exemplify the ongoing process of sanctification and grace in their lives, who are a witness to the world that they have been separated from the world and set apart to be holy.