Despite having the two meanings hammered into us since grade school, many of us still have to stop and think which one we need:
PRINCIPAL means the head of an organization, such as a school. We all know “the principal was our pal.” (I knew one who wasn’t, but I digress.) It means anyone who plays a main or leading role.
Principal also means the main amount of money. You earn interest on the principal.
PRINCIPLE means a standard or rule: we hope most people live by principles that will benefit not only themselves but others as well.