Check out: Reference for Varchar
In short there isn’t much difference unless you go over the size of 255 in your VARCHAR which will require another byte for the length prefix.
The length indicates more of a constraint on the data stored in the column than anything else. This inherently constrains the MAXIMUM storage size for the column as well. IMHO, the length should make sense with respect to the data. If your storing a Social Security # it makes no sense to set the length to 128 even though it doesn’t cost you anything in storage if all you actually store is an SSN.