When you edit stuff, PS will save to its native PSD format. If you want JPEG you have to select it in the save dialog.
psd files are say 40 by 70 inches. If I save them as jpeg will they revert to normal size?
only if you set the quality or size. I have found that my files are about that size as Tiffs. I don't use PSD. I also would not save my working files as JPG because they are lossy files meaning that every time you save them you loose data and the image will degrade over time. I have learned to just live with the bigger files. Your files will get bigger yet when you add layers. I have files that are over a gig, particularly panoramas. I don't understand about why the image size is going up to 40 x 70 inches unless you are increasing it somehow in Photoshop