How do I hold on to hope in Allah’s mercy without that hope becoming an excuse to keep sinning carelessly?
Hope and carefulness are not rivals. The worry behind your question, that hope may quietly turn into permission to be careless, is worth taking seriously. But the answer is not to make your hope smaller. It is to understand what hope is actually for.
Start with the size of Allah’s mercy, because nothing should make it look smaller than it is:
“And My mercy encompasses all things.”
Qur’an, Al-A’raf 7:156 · meaning
All things. There is no corner of your life it cannot reach, and no return it cannot receive. That is the ground you stand on, and its purpose is to keep the road back to Allah open rather than impossible.
The Prophet (peace be upon him) taught us to keep this good expectation of Allah until the last breath:
“None of you should die except while thinking well of Allah.”
The Prophet (peace be upon him), Sahih Muslim (2877a) · meaning
But look closely at what thinking well of Allah means. It is not the calm of someone who has stopped caring. It is the trust of someone who would be ashamed to meet such generosity with a sleeping heart. Good expectation and honest effort travel together. Once they are separated, what is left is not hope, only comfort.
The teachers of this path described the sound heart as a bird flying with two wings. One wing is hope. The other is a reverence that keeps a person awake before Allah. Hope lifts you back to Him after every fall. Reverence keeps you from treating His nearness casually. One wing alone cannot fly, so that awe does not shrink your hope, it completes it.
So keep your hope as wide as that mercy is wide, and simply watch what it does to you. If it makes you quicker to return, quicker to repent, quicker to do the small good thing in front of you, it is hope. If it makes your steps slower, then it is not hope at all, it is something else wearing hope’s clothes.
One small step: Tonight before you sleep, say one sentence of hope, “Your mercy encompasses all things,” and one sentence of longing, “and I want to be worthy of Your nearness,” so both wings move in a single breath.