People have already mentioned most of what I wanted to recommend, so I’ll just list them again with a bit of explanation.
The Erlang VM uses reductions to schedule execution and trigger GC, so the best approach is to write small functions and avoid creating overly large variables (a thousand reductions can lead to high memory usage).
Hibernate processes (to reduce memory usage) when they need to wait a long time for new messages.
Manually trigger GC after function calls that may produce a lot of memory.
Push state to ETS tables (with the :compressed option), then terminate the process.
Use streams for processing when dealing with potentially large memory usage (e.g., big lists).