Remember you high school principal, master of suspensions and stern talking-tos? For spelling purposes, you probably learned that this person was your pal—your principal.
In fact, the word principal has many meanings, and can serve as an adjective or a noun. As an adjective, principal usually means primary or main, as in The principal reason I called you into my office is to discuss your attendance.
As a noun, principal can identify a leader, significant figure, or responsible party. The word can be used to describe a school administrator (your old pal), a lead musician or theatrical performer, or the most important person in a situation.
Likewise, principally is an adverb meaning chiefly, as in Ruby’s small business answering service principally serves businesses seeking great first impressions.
Principal is also used in reference to money. According to Encarta, principal can be a noun meaning the initial sum of money invested or borrowed, or an adjective describing that sum of money.
The word principle has a more concise definition, and can only be used as a noun. A principle is a rule of conduct, guideline, law, or tenet. A person of good moral principles treats others with kindness and respect. The principles of mathematics explain why one plus one equals two.
To summarize, principle and principal do not have any meanings in common. If the word you are using is an adjective, principal is always the correct choice.