Principal and principle are true homophones: Oxford's learner's dictionary gives them the same pronunciation. So the only way to get them right is to know which job each one does.

Principle does one thing. It's a noun for a rule, a law, a theory, or a moral belief that guides what you do: the principles of flight, the principle of free speech, a person with no principles at all. It also lives in a few set phrases: in principle (in theory, as a general rule), on principle (because of a belief), first principles (the most basic rules).

Principal does several things, and that's where the trouble starts. As an adjective it means main or most important: the principal reason, the principal cities. As a noun it names the person at the top, especially the head of a school or college. As an adjective before a job title it marks the lead player: an orchestra's principal conductor. In finance it's the original sum of money lent or invested, as opposed to the interest.

The classic slip is writing "the principle reason" for "the principal reason", or "the school principle" for "the school principal". Ask whether you mean main or a person. If you do, you want principal.

Memory trick. A principle is a rule: both end in -le. Every other meaning — main, chief, head teacher, the money — is principal.