grinding flat surfaces

I'm a new knifemaker, and I was wondering if anyone had any suggestions on making surfaces flat. I don't have a belt sander, and can't afford one. I'm using files and hand tools. I've made three knives so far, mostly out of files, and each one has gotten better, but I'm still having trouble not getting a bow (wide spot) between my tapered tangs and my blade that doesn't take a week to smooth out. I just ordered some new O-1 bar stock (3/16" x 1 1/4") for stock removal blades. Is this a good steel and what can I expect it to perform like if I heat treat it properly?

Get a flat plate and wrap your sandpaper around it.(FLAT)
Turn your piece up-side down and work the flats together.
Use diagonal strokes that cross back and forth until it is flat.
Use a light circular stroke to prove it is flat before going to the next grit.
I start with 120 grit if need be.
I flatten handle material the same way.

I'll second gene on flattening the surfaces. Yes 01 is a good steel to start with. It is forgiving inn heat treat and yields a good blade.