You are currently implementing the FULL Recovery Model from the sound of things. This will allow you to restore to a point in time provided that you have a transaction log backup that covers the desired point in time (post full backup).
In order to reduce the size of your required transaction log file, you should look to increase the frequency of your transaction log backups. I would suggest hourly. Once you have gauged the actual usage of your log file, you can then look to shrink it to a more suitable size. The key point to note here is that once a transaction log backup has been completed, the inactive portion of the log file becomes available for use once again. The reason why a transaction log file grows continuously is if the transaction log backups are either, not being taken at all or their frequency is not sufficient.
I would also suggest that you consider performing a mix of DIFFERENTIAL and FULL Backups in order to reduce the collective size of your backed up data. An example schedule would be a weekly FULL Backup, say every Sunday, with daily DIFFERENTIAL backups.
I hope what I have detailed makes sense. Please feel free to contact me directly and I will happily assist you in deploying an appropriate backup strategy for your environment.
Essential References:
- How to stop the transaction log
file from growing enexpectedly
- Backup and Restoring Databases in
SQL Server