Preheat oven to 325°F.
Using an electric mixer on medium speed, blend butter, sugar and vanilla until fluffy.
Mix in flour and milk.
If too dry, add 1 teaspoon of milk at a time. Dough should hold together but be soft and pliable like pie crust.
Knead on a lightly floured board; careful not to use too much flour or it will be too stiff.
Roll dough out on board and cut out shapes with cookie cutters.
Place cookie cutouts on ungreased cookie sheet and bake for 15-18 minutes. Only cookie edges should look slightly brown; not all browned. Will crisp up when out of oven.
Cool on wire cookie racks.
Frost and decorate as desired.
Note: Don’t limit yourself to Christmas cookies. These cookies can be made for any holiday that has a cookie-cutter: Valentine's Day, Easter, Halloween, etc.