There are several factors one could address, both long-term and immediate. I will address the immediate causes that brought about the collapse of the Spanish Empire.
We can trace the collapse to two primary events- the French Revolution and Napoleon's invasion of Spain.
By the late eighteenth century, Spain was ruled by the Bourbon dynasty, the same dynasty that ruled France. When King Louis XVI was finally executed in 1793 and the French Republic was officially proclaimed, this pitted many European powers against France, including Spain. Spain invaded France in May 1793 but were quickly beaten back by the French. France invaded parts of Spain (Catalonia and the Basque Country) and forced Spain to sign a pact of alliance with the French Republic. The partial occupation of Spain by France set the stage for what became full-scale invasion of Spain in 1808.
This re-alliance of France and Spain reoriented Spanish geopolitical rivalries back toward their traditional enemy, Britain. Thus, Britain and Spain began competing for imperial territory and the Spanish suffered extreme losses. In 1804, the Spanish fleet was decimated at the Battle of Trafalgar, thus severely weakening Spanish military power, and practically cutting them off from contact with the colonies (as well as eliminating any potential military strength they might have to quell any uprisings in the Americas.)
By 1808, Napoleon had already taken over France and turned France into an Empire. Napoleon was motivated to seize Spanish territory for a variety of reasons. He saw Spain's vast imperial holdings as economically lucrative for the French Empire. He also had ideological reasons- Spain was the last stronghold of the Bourbon dynasty left in Europe, and Napoleon hoped that its seizure would destroy the last vestiges left of the Old Regime, allowing Spain to become part of an imperial family of European republics under the influence of France. Thus, Napoleon invaded Spain in May 1808.
The invasion of Spain by France led to the complete collapse of the Spanish state. Because of this, there was little the Spanish state could do to control events developing in the colonies. At the time, many of the colonists did not want independence, but merely home rule. However, many Spanish Americans (especially the criollos, the white American-born elites) were concerned that a French monarch ruling Spain would dash any hopes that Spanish America could develop any prospects for home rule. They were also additionally fearful of Ferdinand VII, Spain's deposed king, who was an absolutist and a conservative who rejected liberal and home rule reform.
When the Spanish finally expelled the French from Spain with the help of the British in 1814, this prompted the return of Ferdinand. Ferdinand rejected all efforts of political reform, rejecting Spain's newly-drafted Constitution of 1812 as well as Spanish American overtures for greater political autonomy within the colonies. This rejection was followed by Ferdinand sending an army to the Americas led by Pablo Murillo.
The failure of Murillo's forces to quell the violence within the Americas was largely due to poor strategy- Murillo's forces were spread too thin as he was forced to contend with Simon Bolivar's troops operating in northern South America (mainly New Granada, modern-day Colombia and Venezuela) and the forces of San Martin, who was primarily operating in Chile and Rio de la Plata. By 1820, Ferdinand had acknowledged that Murillo was going to need reinforcements if he hoped to suppress the uprisings in South America. However, those reinforcements never got there. As the troops in Spain were preparing to set sail for the Americas, the forces, commanded by Major Rafael del Riego mutinied against the crown in Spain demanding that Spain restore the Constitution of 1812 and find a political solution to the crisis in the colonies. With Murillo's forces spread too thin and Spanish reinforcements having never arrived, the South American republics were able to easily beat back the remaining royalist forces and proclaim their new republics.
In New Spain, (Mexico) the situation was very different. Between 1810-1820 there had been various uprisings staged by different leaders, the most prominent being the social revolutionary uprising led by Miguel Hidalgo and the more protracted insurgency campaign waged by Morelos. Both of these campaigns were successfully defeated fairly quickly by Ferdinand. Therefore, Mexican independence was resolved largely through political solutions. New Spain was the most conciliatory with Spain, hoping a political solution could be found to the crisis in the colonies. New Spaniards were divided about the best strategy- liberal peninsulares (those born in Spain) believed that if Mexico adopted the Constitution of 1812, they could have adequate representation in the Cortes (the SPanish Parliament) and that that would be a worthy compromise for home rule. However, the Criollos felt that such a compromise was not enough, and that New Spain should be ruled exclusively by those who were born in the colonies.
When Rafael del Riego restored the Constitution of 1812 in Spain, this angered many different factions within Mexico and provided a political window for independence. Riego was a liberal but his politics found little sympathy in Mexico. Criollos didn't like the Constitution because, while it granted Mexico representation in the Spanish parliament (the Cortes), they felt the representation offered was still grossly unequal. Furthermore, criollos argued that the colonies ought to be run fully autonomously by people born in the colonies and not as a unitary representative body within the Spanish crown. However, criollos soon found an unlikely alliance with royal absolutists in Mexico. The restoration of liberal government in Spain meant the passage of new anticlerical and disentailment laws- liberal government in Spain began to break up church and noble land. Mexican conservatives suddenly did not have a good reason to support the Spanish crown since the crown's government was now a liberal government. Because of this, criollo autonomists and Mexican absolutists entered into an unholy alliance and agreed through the Plan of Iguala to proclaim an independent Mexican Empire that could satisfy criollo demands for autonomy but maintain a conservative Mexican monarchy backed by the church and the Mexican nobility.
In conclusion, Spain was basically in a state of war between 1793-1823. This state of near-constant war made controlling political developments in the colonies almost impossible. The war against France created political opportunities in both the Americas and SPain for political reform, but Ferdinand, who was Spain's king before he was deposed by Napoleon, rejected any attempts to find a political solution to the crisis in Spain and the colonies. This rejection pushed the colonies into open war with Ferdinand but Ferdinand spread his forces too thin and had made far too many enemies. It bit him in the butt in 1820 when the liberals rebelled against him in Spain, which prevented him from sending more reinforcements to quell the remaining uprisings. This gave Mexico an opportunity to politically negotiate for their own independence. By that point, with Spain in chaos domestically and within the colonies, they had little choice but to accept these terms.