The setting takes place on Christmas Eve in a very modest apartment. The couple's humble living environment helps the reader clearly visualize their poverty. The fact that Della and Jim are poor forces them to sacrifice, while simultaneously making the sacrifices more meaningful. O.Henry uses imagery to depict the couple's cheap, shabby living arrangements. The author creates a strong contrast between their poverty and their rich love for one another. This quote assists in illuminating this contrast: “She stood by the window and looked out dully at a gray cat walking a gray fence in a gray backyard.”