Origin
The phrase was actually used as early as 1538 in a letter from Thomas Howard, the third Duke of Norfolk, to Thomas Cromwell, chief minister to King Henry VIII.
Explanation
Once the cake is eaten, it is gone. It can be used to say that one cannot or should not have or want more than one deserves or can handle, or that one cannot or should not try to have two incompatible things. It illustrates the concept of making trade-offs and realizing that you can’t have something if you have another. The phrase is often used while referring to compromises and alludes to making a choice between two options that could never be reconciled. In other words, the two options that are mutually exclusive. It means that if you eat your cake you won’t have it any more. The point is that if you eat your cake right now you won’t have it to eat later. “Have” means “possess” in this context, not “eat”. It is to have or do two good things at the same time that are impossible to have or do at the same time. It is also used for expressing disdain for a situation where two things seemingly should go together but, for whatever reason, something is missing and the situation is now awkward.
Examples
I worked at home, so I could raise my family and still earn money. It let me have my cake and eat it too.
Tom wants to have his cake and eat it too. It can’t be done.
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