No, I mean have an external server (ideally with a static IP address) and point the domain to that. And then have your local machine (hosting Lemmy) connect to that server and reverse-proxy the Lemmy port.

I haven't tried it with Lemmy so I'm not 100% sure the domain settings in Lemmy would work with this setup (since the domain wouldn't resolve to your local machine where it's actually running, and maybe Lemmy depends on that). But the idea is external users would just see the VPS, and have no idea that it's actually served from your local machine over a reverse proxy there.

You'd have to pay for VPS traffic though, but aside from that it wouldn't need much hardware, so should be cheap.

But you might also want to re-consider running it locally at all in this case. If the instance is small, it might work out just the same just to host it directly in the cloud. And then you can set up automatic setup and migration with Terraform / CDK ,etc.