My system data is about 109 GB. On thing I do to reduce it is launch Disk Utility and remove all but the latest local snapshot:

There's not a lot you can do to reduce it except the above and to move some folders to an external drive. Here's how I worked around the problem other than the above:
I wanted to keep a minimum of 100GB of free space at all times for optimal system and application performance. :
1 - get an external SSD drive and format it APFS. (I recommend OWC (MacSales.com))..
2 - copy the Pictures, Movies, and Music folders to the external SSD.
3 - make sure the libraries in those folders work as expected on the external SSD.
4 - once confirmed the libraries are working OK on the SSD delete the contents of the Pictures, Movies an Music folders. DO NOT delete the folders themselves.
5 - rename the folders on the SSD to Pictures-2, Music-2 and Movies-2.
6 - remove the original folders from the Finder's sidebar and replace them with the -2 folders by dragging them from the SSD into the sidebar of an open Finder window.
