Line baking sheet with parchment paper. Mix ⅔ cup unsalted butter and ¾ cup granulated sugar with an electric mixer until light at fluffy, about 3 minutes.
Now mix in 1 large egg and 1 tsp vanilla extract.
Sift in the 2 cups all-purpose flour and ¼ tsp salt. Gently mix by hand with a wood spoon until combined. Do not overmix in this step.
Add 1 or 2 Tbsp of milk (only if needed) until the batter sticks together and forms a soft cookie dough. Let the cookie dough chill in the fridge for 20 minutes.
Gently knead the cookie dough into a ball using your hands. Next, roll out the cookie dough on a floured surface. Use cookie cutters to create desired shapes or twist them into a pretzel shape. Place each one on the prepared baking sheet. Gently press sprinkles and granulated sugar into the tops if desired.
Preheat oven to 350°F. Bake cookies for 6-8 minutes, until the edges are golden brown. Let cool for 15 minutes then transfer to a rack to cool completely.