File system helps in managing the free space by the following ways.
1. Since there is only a limited amount of disk space, it is necessary to reuse the space from deleted files for new files. To keep track of free disk space, the system maintains a free-space list. The free-space list records all disk blocks that are free (i.e., are not allocated to some file).
2.To create a file, the free-space list has to be searched for the required amount of space, and allocate that space to a new file. This space is then removed from the free-space list. When a file is deleted, its disk space is added to the free-space list.