I use an app called BarBee for this. I heard great things about bartender as well. There are a few other decent options. But, yeah, the bottom line is, it's kind of crazy how Apple did not think about this, about the overcrowding of the menu bar and implement an auto-collapse mechanism or something like that.

The true short-sightedness Apple has had becomes really obvious in the latest liquid glass UI, whatever the fuck that is called. It's a grand fuck to a decent-looking UI that existed before that.