Bring water (and milk, if using) and salt to a boil in a saucepan.
Slowly whisk in grits to avoid lumps.
Reduce heat to low, cover, and simmer for 20–30 minutes, stirring occasionally, until thick and creamy.
Stir in butter and cheese at the end. Keep warm.
2. Cook the Shrimp:
In a large skillet, cook chopped bacon over medium heat until crispy. Remove and set aside, leaving the fat in the pan.
Sauté onion/shallot in bacon fat until soft (about 3–4 min).
Add garlic, paprika, and cayenne; cook 30 seconds.
Add shrimp, season with salt and pepper, and cook 2–3 minutes per side until just opaque.
Squeeze in lemon juice, stir in crispy bacon.
3. Serve:
Spoon creamy grits into bowls.
Top with shrimp, pan sauce, and garnish with parsley or green onion.