I think you've got your understanding of the two properties off a little. Border affects the outside edge of the element, making the element different in size. Outline will not change the size or position of the element (takes up no space) and goes outside the border. From your description you want to use the border property.
Way late, but I just ran into a similar issue.
My solution was pseudo elements - no additional markup, and you get to draw the border without affecting the width.
Position the pseudo element absolutely (with the main positioned relatively) and whammo.
Outline will not interfere with widths and lenghts of the elements/divs!
Please click the link I provided at the bottom to see working demos of the the different ways you can make borders, and inner/inline borders, even ones that do not disrupt the dimensions of the element! No need to add extra divs every time, as mentioned in another answer!
You can also combine borders with outlines, and if you like, box-shadows (also shown via link)
Usually by default, 'border:' puts the border on the outside of the width, measurement, adding to the overall dimensions, unless you use the 'inset' value:
div {border: inset solid 1px black};
But 'outline:' is an extra border outside of the border, and of course still adds extra width/length to the element.