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The exposition is the beginning when Delia and Jim Young find themselves in desperate circumstances just a couple of days before Christmas. The rising action is the decision of Delia to cut her hair in order to sell it to a wigmaker and buy Jim a chain for his cherished pocket watch. The climax occurs when Jim and Delia discover that Jim has sold his watch to buy hair combs for Delia's now-short hair; the fact that he no longer has a watch to attach the chain to completes the irony.
The falling action is the realization that their gifts are now meaningless but they have given so generously and from their hearts that the actions are more priceless than the possessions. The resolution is the fact that Jim and Delia remain in love despite their heartbreaking errors.
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