just to be difficult i do neither, i tend to finish all my wood projects with a worn out old metal file, same kind of finish you get with sandpaper without all those harmfull sand emissions
seriously though, a couple of quid for half a dozen sheets of sandpaper that you can easily get through in an afternoons woodwork or 10p for an old file from the car boot that you're never going to wear out. if you get a half round file it's so much more versatile as a tool than a bit of sandpaper, you can even use to sharpen your knife when you've finished whittling
cheers
stuart