Place milk, water and butter in a medium-size pot and bring to a heavy simmer. Watch closely because milk mixture will boil over quickly and make a huge mess.
Slowly pour grits into the pot while stirring to prevent clumping.
Cover pot and turn down to low. Continue to stir the grits every few minutes or they will stick and burn. Before when removing lid and stirring because the hot grits like to pop out and will burn you.
Cook for 20 to 30 minutes or until done. Remove from heat and stir in the cheese and spinach.
Serve with topped with your choice of crumbled bacon, butter, more cheese or a little more butter.