How to Thank Allah for His Blessings
Question

What are the best ways a Muslim can thank Allah for all the blessings He has bestowed on us?
Praise be to Allah.Gratitude towards Allah
Thanks or gratitude means reciprocating kindness and giving praise to the one who has done good and kind things. 
The one who is most deserving of thanks and praise from people is Allah, may He be glorified and exalted, because of the great favours and blessings that He has bestowed upon His slaves in both spiritual and worldly terms. Allah has commanded us to give thanks to Him for those blessings, and not to deny them. He says (interpretation of the meaning):
“Therefore remember Me (by praying, glorifying). I will remember you, and be grateful to Me (for My countless favours on you) and never be ungrateful to Me” [2:152] 
The greatest ones who thanked Allah
The greatest ones who obeyed this command, and gave thanks to their Lord until they deserved to be described as shakir and shakur (thankful) are the Prophets and Messengers (blessings and peace of Allah be upon him). 
Allah says (interpretation of the meaning): 
“Verily, Ibrahim was an Ummah (a leader having all the good righteous qualities), or a nation, obedient to Allah, Hanif (i.e. to worship none but Allah), and he was not one of those who were Al-Mushrikun (polytheists, idolaters, disbelievers in the Oneness of Allah, and those who joined partners with Allah). (He was) thankful for His (Allah’s) favours. He (Allah) chose him (as an intimate friend) and guided him to a Straight Path (Islamic Monotheism — neither Judaism nor Christianity).” [An-Nahl 16:120, 121]
“O offspring of those whom We carried (in the ship) with Nûh (Noah)! Verily, he was a grateful slave.” [Al-Isra 17:3] 
Allah’s blessings bestowed upon his slaves
Allah has mentioned some of the blessings that He has bestowed upon His slaves, and has commanded them to be grateful for them, and has told us that few of His slaves give thanks to Him: 
Allah says (interpretation of the meaning): 
1.     “O you who believe (in the Oneness of Allah — Islamic Monotheism)! Eat of the lawful things that We have provided you with, and be grateful to Allah, if it is indeed He Whom you worship” [2:172] 
2.     “And surely, We gave you authority on the earth and appointed for you therein provisions (for your life). Little thanks do you give.” [ Al-A`raf 7:10] 
3.      “And among His Signs is this, that He sends the winds as glad tidings, giving you a taste of His Mercy (i.e. rain), and that the ships may sail at His Command, and that you may seek of His Bounty, in order that you may be thankful. ” [Luqman 31:46] 
4.     Among spiritual blessings, He mentions (interpretation of the meaning):
“O you who believe! When you intend to offer As-Salah (the prayer), wash your faces and your hands (forearms) up to the elbows, rub (by passing wet hands over) your heads, and (wash) your feet up to the ankles. If you are in a state of Janabah (i.e. after a sexual discharge), purify yourselves (bathe your whole body). But if you are ill or on a journey, or any of you comes after answering the call of nature, or you have been in contact with women (i.e. sexual intercourse), and you find no water, then perform Tayammum (dry ablution) with clean earth and rub therewith your faces and hands. Allah does not want to place you in difficulty, but He wants to purify you, and to complete His favour to you that you may be thankful.” [Al-Maidah 5:6] 
And there are many other blessings. We have only mentioned some of these blessings here; listing all of them is impossible, as Allah says (interpretation of the meaning):
“And He gave you of all that you asked for, and if you count the blessings of Allah, never will you be able to count them. Verily, man is indeed an extreme wrongdoer, a disbeliever (an extreme ingrate who denies Allah’s blessings by disbelief, and by worshipping others besides Allah, and by disobeying Allah and His Prophet Muhammad.” [Ibrahim 14:34] 
Then Allah blessed us and forgave us our shortcomings in giving thanks for these blessings. He says (interpretation of the meaning):
“And if you would count the favours of Allah, never could you be able to count them. Truly, Allah is Oft-Forgiving, Most Merciful.” [An-Nahl 16:18] 
Asking Allah to give thanks to Him
The Muslim is always asking his Lord to help him to give thanks to Him, because were it not for Allah’s helping His slave, he would not be able to give thanks. Hence it is prescribed in the sahih Sunnah (authentic prophetic teachings) to ask for help from Allah to give thanks to Him. 
It was narrated from Mu'adh ibn Jabal that the Messenger of Allah (blessings and peace of Allah be upon him) took his hand and said: “O Mu’adh, by Allah I love you, by Allah I love you.” Then he said, “I advise you, O Mu’adh, do not fail following every prayer to say: O Allah help me to remember You, thank You and worship You properly.” Narrated by Abu Dawud and al-Nasai . 
Gratitude for blessings is a cause of them being increased, as Allah says (interpretation of the meaning):
“And (remember) when your Lord proclaimed: ‘If you give thanks (by accepting faith and worshipping none but Allah), I will give you more (of My blessings); but if you are thankless (i.e. disbelievers), verily, My punishment is indeed severe’.” [Ibrahim 14:7] 
How to thank Allah
How can a person thank his Lord for His great blessings? His gratitude should fulfill all the necessary conditions, which are gratitude of the heart, gratitude of the tongue and gratitude of the physical faculties. 
Ibn al-Qayyim (may Allah have mercy on him) said:
“Gratitude may be in the heart, in submission and humility; on the tongue, in praise and acknowledgement; and in the physical faculties, by means of obedience and submission.” (Madarij al-Salikin (2/246) 
How to thank Allah in your heart
The details of that: 
Gratitude of the heart: what is meant is that the heart senses the value of the blessings that Allah has bestowed upon His slave, and fully acknowledges that the One Who has bestowed these great blessings is Allah Alone, with no partner or associate. Allah says (interpretation of the meaning):
“And whatever of blessings and good things you have, it is from Allah.” [An-Nahl 16:53] 
This acknowledgement is not mustahabb (recommended), rather it is obligatory. Whoever attributes these blessings to anyone other than Allah has disbelieved. 
Shaykh ‘Abd al-Rahman al-Sa’di (may Allah have mercy on him) said: 
“What man should do is attribute blessings to Allah and acknowledge them fully. Thus he will attain complete Tawhid. Whoever denies the blessings of Allah in his heart or on his tongue, is a kafir (disbeliever) and has nothing to do with Islam. 
Whoever affirms in his heart that all blessings come from Allah Alone, but verbally he sometimes attributes them to Allah and sometimes attributes them to himself, or his actions, or the efforts of someone else -- as happens on the lips of many people -- this is something that the person must repent from, and he should not attribute blessings to anyone except their Creator, and he must strive to make himself do that, because faith and Tawhid cannot be attained except by attributing blessings to Allah. 
The gratitude which is the head of faith is based on three pillars: acknowledgement of the heart of all the blessings that Allah has bestowed upon him, and upon others, and talking about them; praising Allah for them; and using them to obey the One Who bestowed the blessings and to worship Him.” (Al-Qawl al-Sadid fi Maqasid al-Tawhid, p. 140) 
Allah says, describing the situation of one who denies attribution of blessings to Allah (interpretation of the meaning):
“They recognise the Grace of Allah, yet they deny it (by worshipping others besides Allah) and most of them are disbelievers (deny the Prophethood of Muhammad).” [An-Nhal 16:83].
Ibn Kathir (may Allah have mercy on him) said: 
“I.e., they acknowledge that Allah is the One Who grants them that, and He is the One Who bestows that favour upon them, yet despite that they deny it, and worship others alongside Him, and attribute victory and provision to someone other than Him.” (Tafsir Ibn Kathir (4/592) 
How to thank Allah by your tongue
As for gratitude of the tongue, it means acknowledging verbally - after believing in the heart- that the One Who grants blessing is indeed Allah, and keeping the tongue busy with praise of Allah, may He be glorified and exalted. 
Allah says, explaining His blessings to His slave Muhammad (blessings and peace of Allah be upon him): “And He found you poor and made you rich (self-sufficient with self-contentment)?” [93:8]. Then He reminded him in return for that: “And proclaim the grace of your Lord (i.e. the Prophethood and all other graces)” [al-Duha 93:11] 
Ibn Kathir (may Allah have mercy on him) said: 
“I.e., as you were poor and in need, then Allah made you rich and independent of means: then speak of the blessing of Allah bestowed upon you.” (Tafsir Ibn Kathir, 8/427) 
Anas ibn Malik said: the Messenger of Allah (blessings and peace of Allah be upon him) said: “Allah is pleased with a person who eats some food and then praises Him for it, or who drinks some drink and then praises Him for it.” (Narrated by Muslim)
Abu’l-‘Abbas al-Qurtubi (may Allah have mercy on him) said: 
“Praise here means gratitude, and we have seen above that praise may take the place of gratitude but gratitude may not take the place of praise. This indicates that gratitude for blessings -- even if they are few -- is a means of attaining the pleasure of Allah, may He be exalted, which is the noblest situation of the people of Paradise. When the people of Paradise say, “You have given to us what You have not given to anyone among Your creation,” Allah will say to them: “ Shall I not give you something better than that?” They will say, “What is it? Have You not brightened our faces, and admitted us to Paradise and saved us from Hell?” He will say, “I bestow My pleasure upon you, and I will never be angry with you after that.” 
Gratitude is a means of attaining that great honour because it implies acknowledgement of the Bestower of blessings and acknowledging Him Alone as the Creator of that blessing and the One Who caused it to reach the recipient of the blessing, as an honour and favour from the Bestower, and that the recipient of the blessing is poor and is in need of that blessing, and cannot do without it. So this is an acknowledgement of the rights and bounty of Allah, and the duty and need of the slave. So Allah has caused the reward for that acknowledgement to be this great honour.” (Al-Mufhim lima ashkala min Talkhis Kitab Muslim, 7/60, 61) 
Hence some of the salaf (righteous predecessors) said: Whoever conceals a blessing has denied it, but whoever manifests it and spreads it has given thanks for it. 
Ibn al-Qayyim said, commenting on that:
“This is based on the words: “When Allah bestows a blessing upon a person, He loves the effect of His blessing to be seen on His slave.” (Madarij al-Salikin, 2/246) 
‘Umar ibn ‘Abd al-‘Aziz (may Allah have mercy on him) said: “Remind one another of blessings, for mentioning them is gratitude.” 
Gratitude of the physical faculties 
Gratitude of the physical faculties means using one's physical faculties in obedience of Allah and keeping them from committing sins and acts of disobedience that Allah has forbidden. 
Allah says (interpretation of the meaning):
“‘Work you, O family of Dawud (David), with thanks!”” [Saba 34:13] 
‘Aishah said: When the Messenger of Allah (blessings and peace of Allah be upon him) prayed, he would stand for so long that his feet became swollen. ‘Aishah said: O Messenger of Allah, are you doing this when Allah has forgiven your past and future sins? He said: “O ‘Aishah, should I not be a thankful slave?” (Narrated by al-Bukhari and Muslim)
Ibn Battal (may Allah have mercy on him) said: 
“Al-Tabari said: the correct view concerning that is that the person’s gratitude is affirming that this is from Allah and no one else, and affirmation of this fact is action, and it is confirmed by action. As for the affirmation which is contradicted by action, the one who does that does not deserve to be called grateful at all. But it may be called gratitude of the tongue. The evidence that this is true is the words of Allah (interpretation of the meaning): “ ‘Work you, O family of Dawud (David), with thanks!’” [34:13]. It is well known that He did not order them, when He said that to them, to affirm His blessings, because they did not deny that this was a favour from Him to them. Rather He commanded them to give thanks for His blessings by obeying Him in their actions. Similarly, the Prophet (blessings and peace of Allah be upon him), when his feet swelled up as he was praying at night, said: “Should I not be a thankful slave?” (Sharh Sahih al-Bukhari)
Abu Harun said: 
“I entered upon Abu Hazim, and said to him: May Allah have mercy on you, what is the gratitude of the eyes? He said: If you see something good with them, you mention it, and if you see something bad with them, you conceal it. I said: What is the gratitude of the ears? He said: If you hear something good with them, you remember it, and if you hear something bad with them, you forget it.” 
Ibn Rajab al-Hanbali (may Allah have mercy on him) said: 
“Gratitude is of two degrees, one of which is obligatory, which is doing obligatory actions and avoiding haram (unlawful) things. This is essential and is sufficient as gratitude for these blessings. 
Hence one of the salaf said: “Gratitude means giving up sin.” 
And one of them said: “Gratitude means not using any blessing to help one to disobey Him.” 
Abu Hazim al-Zahid mentioned gratitude of all the physical faculties: “(It means) refraining from sin, and using them to help one to do acts of obedience. Then he said: As for the one who gives thanks with his tongue but does not give thanks with all of his physical faculties, his likeness is that of a man who has a cloak and takes hold of the edge of it, but does not put it on, so it is of no benefit to him against cold or heat or snow or rain. 
The second degree of gratitude is that which is mustahabb, which is when, after doing obligatory actions and avoiding haram things, a person does supererogatory acts of worship. This is the degree of those who have gone ahead and closer to Allah.” (Jami’ al-‘Ulum wa’l-Hikam. p. 245, 246) 
Summary of the ruling 
In order to be grateful to your Lord for the blessings that He has bestowed upon you, you must acknowledge in your heart that the Giver of these blessings and the Bestower is Allah, may He be exalted, so you venerate Him, attribute it to Him, and you acknowledge that with your tongue, so you give thanks to Him after waking from sleep for having given new life, and after eating and drinking for having provided you with them and bestowed them upon you, and so on with every blessing that you see in your life. 
You give thanks with your physical faculties by not letting them see or hear any sin or evil, such as singing or gossip; you do not walk with your feet to haram places; you do not use your hands to commit evil, such as haram writing in a relationship with non-mahram women (one whom you can marry according to Islamic law), or writing haram contracts, or making or doing anything haram. Giving thanks with the physical faculties for blessings also includes using them to obey Allah, by reading Quran and books of knowledge, listening to beneficial and useful things, and so on with all the faculties which you should use in various kinds of obedience and worship. 
Remember that gratitude for blessings is a blessing which needs to be given thanks for, so that one will continue to enjoy the blessings of his Lord, thanking his Lord for those blessings and praising Him for helping him to be among those who give thanks. 
We ask Allah, may He be exalted, to help us and you to do that which He loves and which pleases Him. 
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And Allah knows best.