If you find that you really are using too much memory, and you have a reason to keep the string in memory rather than caching them on disk, there are certainly ways you can reduce the memory requirements. It's a sad fact that Java strings use a lot of space. They require two objects (the string itself and an underlying char array) and use two bytes per char. If your data is mostly 7-bit ASCII, you may be better of leaving it as a UTF-8 encoded byte stream, using 1 byte per character in the typical case.
A very effective scheme is to maintain an array of 32k byte buffers, and append the UTF-8 representation of each new string onto the first empty space in one of those arrays. Your reference to the string becomes a simple integer: PTR = (buffer index * 32k) + (buffer offset). "PTR/32k" yields the index of the desired byte buffer, and "PTR % 32k" yields the location within the buffer. Use either an initial length byte or a null terminator to keep track of how long the string is. When you need to access one of the strings, don't allocate a new String object: unpack it into a mutable StringBuilder or work directly with the UTF-8 byte representation.
The above approach is obviously a lot more work, but can save you between a factor of 2 and 6 in memory usage (depending on the length of your strings). However, you should beware of premature optimization. If your problem is with the processing time to parse your input, or is somewhere else in your program, you could find that you've done a lot of work to fix something that isn't your bottleneck and thus get no improvement at all.