In a small mixing bowl, beat together milk, egg, vanilla and food coloring. Add to dry mixture and work to form a ball. Cover dough and refrigerate for at least 2 hours. Divide dough into three parts, working with one while keeping the others refrigerated. Roll out onto generously floured board and cut into desired shapes.
Transfer cookies to an ungreased baking sheet.
Bake for 7-10 minutes or until only the edges are slightly golden. Cool on wire racks. Decorate as desired.