Use an electric mixer on medium speed to blend the butter until it is smooth. Add the cream cheese and blend it together until there are no lumps. Then add the vanilla. Use the spatula to push down anything sticking to the sides of the bowl.
Mix in the confectioners' sugar a little bit at a time on the lowest speed — otherwise it will fly everywhere! Use the spatula to push down anything sticking to the sides of the bowl.
Use the frosting right away. Technically it will last at least a week in the refrigerator (bring to room temperature before using), but fresh frosting is key! It tastes and feels so much better.