Preheat oven to 325°F and line two baking sheets with parchment paper.
In a bowl, sift the flour and powdered sugar. Now add softened butter and vanilla extract. Mix with a handheld mixer on low speed until crumbly. Lightly knead with your hand until a smooth dough forms.
Let chill in fridge for 30 minutes
Roll the dough out to 1/4". Cut into desired shapes and lay on the baking sheet. Optionally you can stamp out a design on top. Let chill in freezer until all pieces are ready.
Bake for 12-15 minutes until lightly golden. Let cool for 10 minutes.
Store in the fridge in an airtight container for 5-6 days. Eat warm or cool.