01 - In a medium saucepan, bring milk and water to a gentle boil over medium heat.
02 - Slowly whisk in the grits to prevent lumps.
03 - Reduce heat to low, cover, and simmer, stirring frequently, until thick and creamy (about 20–25 minutes).
04 - Stir in butter, salt, and pepper until fully incorporated.
05 - Remove from heat and fold in the cheddar cheese until melted and smooth.
06 - Taste and adjust seasoning as needed. Serve hot.