Using a stand mixer or hand mixer, beat the softened butter, cream cheese, and sugar together on medium speed until fluffy (about 2 minutes).
Add egg yolk and vanilla, beat until combined (about 1-2 minutes).
Gradually add the flour and beat on low speed until just combined (2 minutes).
Using your hands, gather the dough into a ball and flatten to a 1-inch thick disk.
Wrap in plastic wrap and chill for 30-60 minutes or as long as 1 day.
Remove from the fridge. Unwrap and place it on a lightly floured surface.
Roll out the dough evenly until it is approximately 1/8-inch thick. Use cookie cutters to cut out your desired shapes (You can re-roll the leftover dough as needed and re-cut. )