Localstack makes that pretty easy. Before Localstack I had a pre-staging environment (dev) target I would deploy to. Their free/community offering includes a Lambda environment; you deploy your dev "Lambda" locally to docker, using the same terraform / deploy flow you'd normally use but pointed at a Localstack server which mimics the AWS API instead. Some of their other offerings require you to pay though (Cloudfront, ECS, others) and I don't use those, yet at least.
I dealt with a microservice style serverless backend that was spread out across roughly 50 Go-based lambdas, one per API endpoint, with a few more for SQS and Cognito triggers. Was deployed via CloudFormation. Testing locally was an absolute nightmare even with Localstack.
Made me wish for a simple VPS, an ansible script to setup nginx and fail2ban and all that shit, and a deployment pipeline that scp'd a single binary into the right place.
I had a horrible time with Localstack. It's very similar to AWS but not exactly the same, so you hit all kinds of annoying edges and subtle bugs or differences and you're basically just doing multi-cloud at that point. The same kinds of problems you encounter with slightly inaccurate mocks in automated testing.
The better solution in my experience is to create an entirely different account to your production environments and just deploy things there to test. At least that way you're dealing with the real SQS, S3, etc, and if you have integration problems there, they're actually real things you need to fix for it to work in prod - not just weird bandaids to make it work with Localstack too.
Developer-specific sandbox environments with hot code reload is the golden standard here but Localstack is great if you can't do that due to (usually IT deparment-related, not technical) reasons.
