Beat egg and sugar together in a saucepan.

Add milk and mix thoroughly.

Place the saucepan with the egg/milk mixture inside another pan containing 1-2 inches of boiling water.

Stir constantly while cooking. Cook until foam disappears and custard coats the spoon. Remove from heat.

Add vanilla extract (optional), stir, and pour into individual dishes. Cool in the refrigerator. Custard will be soft.

Alternatively, beat together egg and sugar in a baking dish. Add milk and mix, including optional vanilla extract.

Set the baking dish in a shallow pan of hot water.