Even better than the test button in the Lambda console, there are a bunch of tools that let you simulate a local AWS environment & pretty much test your lambda functions completely locally making debugging simpler & faster as well as avoiding any Amazon usage fees. I personally didn’t bother emulating the whole stack (with localstack) but rather just ran my lambda functions with emulambda (for python) and let it use actual AWS resources (dynamodb, etc).
I found Lambda to be great for small functions likes your sms auth example but couldn’t get a development setup that I felt was efficient enough so am still not quite ready to move away from an express.js backend.
localstack - A fully functional local AWS cloud stack. Develop and test your cloud apps offline!github.com