Frosted vanilla beans. Photo: Nilan, Flickr
First, select a bottle of good quality alcohol that is at least 40 percent spirited. Though vodka is often the liquor of choice due to its neutral flavor, you might enjoy using rum for its added complexity. Select a clean glass jar or bottle that holds roughly one cup -- you'll need to sterilize it in boiling water first.
Next, using three medium vanilla beans, slice them open lengthwise and drop them into the container. Pour one cup of alcohol in to cover them and seal lid tightly. Shake well, and let the jar rest in a dark cabinet for approximately two months, remembering to shake it a couple times a week -- or whenever you stumble upon it when reaching other cabinet ingredients.
You'll notice the liquid getting progressively darker over time. And after two months, your vanilla extract will be good to go -- but should be thoughtfully maintained. When you notice the liquid getting a little lower, you should top it off with additional alcohol. Also, to keep the flavor potent, toss in the shells of your vanilla beans as you use them with cooking. If the jar gets too full, simply remove the older beans to keep a fresh rotation.
Not only will your baking improve with the inclusion of fresh vanilla beans, the extract will get better and better over time.