What does description of the apartment tell us about the economic situation of the couple in "The Gift of the Magi"?

O. Henry states specifically that the Youngs live in a cheap furnished flat and that the rent is eight dollars a week.

While the mistress of the home is gradually subsiding from the first stage to the second, take a look at the home. A furnished flat at $8 per week. It did not exactly beggar description, but it certainly had that word on the lookout for the mendicancy squad.

Then he goes on to describe a typical flat in that category. New York was full of tall old buildings that had once been the private residences of affluent families. They had been converted to flats, as in "The Gift of the Magi" or rooming houses, as in "The Furnished Room." O. Henry have enjoyed writing such descriptions. He picks out details in the Youngs' flat that tell a lot about the rest of the place and a lot about the economic situation of this couple. He does not use blocks of description but drops little details here and there, up to the point where Della audaciously decides to sell her hair and goes rushing out of doors in her old brown jacket and her old brown hat.

The first detail, or example, is "the shabby little couch" on which Della drops down to cry. Then there is the vestibule with "a letter-box into which no letter would go, and an electric button from which no mortal finger could coax a ring." Back in the flat we see the pier-glass, which is a long, narrow mirror.

Perhaps you have seen a pier-glass in an $8 flat. A very thin and very agile person may, by observing his reflection in a rapid sequence of longitudinal strips, obtain a fairly accurate conception of his looks.  

At least Della is still young. We can picture her mirthlessly dancing back and forth in front of that mirror.

The author even gives a glimpse of the outside.

She stood by the window and looked out dully at a grey cat walking a grey fence in a grey backyard. 

And finally Della drops a tear or two on the "worn red carpet." These few select details give an overall impression of the depressive appearance and haunted aura of the building, the neighborhood, and the flat. We realize that Della and her husband are near the bottom of the economic ladder. This is essential to the story, because O. Henry's theme is that their love for each other makes everything else all right.

O. Henry not only sympathized with the little people who were struggling to survive in the big, cold city of New York, but they were his audience. They read his stories in the newspapers and magazines, which were about the only kind of literature they could afford. They understood him, and he understood them. He was a well-loved writer in his time. He was not a crusader for any political cause. He was a fellow-sufferer. 

The general shabbiness of the flat, without a single amenity, is intended to serve as a contrast to the two treasures this couple possesses. Both Della's beautiful hair and Jim's handsome gold watch are made to shine all the more brilliantly because of the dingy surroundings. Della's hair would arouse envy in the Queen of Sheba, and Jim's watch would do the same to King Solomon in these comically exaggerated comparisons. The enormous value of these two treasures makes us appreciate their sacrifice, their love, and their courage even more.