The first three paragraphs describe how she dresses and her lifestyle. She is a lower class woman who doesn't dress like other rich women, she has a husband who works at the Ministry of Public Instruction, and treats her very well
He receives an invitation in the mail to go to the palace of the Ministry on January 18th, but she has no jewelry to wear and feels the need to wear some.
She is getting ready for the ball, and she goes to her friend Mme. Forestier to borrow some jewelry because she has none. She chooses a very pretty diamond necklace.
She loses the diamond necklace at the ball and they buy a similar one to give to Mme. Loisel.
Mme. Loisel doesn't notice that it is a different one than she gave her.
She later tells Mme. Loisel that it was a fake and they worked very hard to pay it off. Mme. Loisel laughs at that and says it was only worth 500 francs.