Time machine backup - not enough space

Hello,

I'm getting a message stating that there is not enough space to complete a time machine backup. I was under the impression that once my backup drive fills up the oldest file(s) will be deleted automatically to make sure that I always have an up to date back up to rely on. Is there a configuration I need to do to accomplish this? If old backups can't be automatically deleted then how to I make more space on my backup drive?

Thank you